By Meghan Hall
The Austin, a newly constructed condominium complex located in San Francisco’s growing Lower Polk neighborhood, welcomed its first residents in late December. As new construction condominium inventory continues to decline year over year, and with just under 300 active condominium listings in the City of San Francisco, The Austin’s 100 units are welcome inventory.
The Austin was developed by Pacific Eagle Holdings Corporation, a San Francisco-based real estate manager with over twenty years of experience in managing hotels, offices and condominiums in the United States. The company is the US entity of Hong Kong-based Great Eagle Holdings Limited, an owner, developer and operator of numerous real estate investments around the world.
The 12-story development, situated between the Nob Hill and Pacific Heights neighborhoods, is within walking distance of Polk Street’s vibrant restaurant scene. Bike and trolley access to the Financial District and proximity to the freeway make The Austin’s location even more attractive to potential buyers.
The Bay Area is still extremely supply-constrained, and we see 2018 as a strong year for real estate in San Francisco. We anticipate first-time homebuyers to be more active in 2018, leading to a greater demand
The residences, designed by Edmonds + Lee Architects for the interiors and BDE as the architect for the building, are stylishly fitted with white oak hardwood floors, integrated cabinets, floor-to-ceiling windows and Nest thermostats. The complex is selling a variety of studio, junior one-, one- and two-bedroom homes with over 40 different floor plans ranging from the $700,000s to upward of $2 million.
The interior of the complex features not only bike parking, pet washing stations and a lobby attendant, but also several common areas such as a coworking lounge and a rooftop terrace complete with fire pits and views of the City. According to Lindsey Fisher, the development manager for Pacific Eagle, the building’s design is intended to encourage a more collaborative lifestyle.
“The Austin’s amenities are centered around communal spaces where people can be surrounded by community and interact with others,” said Fisher. “For example, we designed our lobby to be a sort of coworking space. It would be like an annex to one’s living room, where you can pop down, have a bit of coffee and use the WiFi for a change of scenery.”
The design has been popular with buyers and has drawn people from all over the Bay Area according to Fisher. Many of the buyers are young couples looking to purchase their first home and young professionals who live in the neighborhood and want to make the jump from renting to buying. The Austin also has attracted retired couples looking to downsize as well.
The Austin began actively selling its residences in February 2017 when the building was still under construction and has sold approximately 50 units. Fisher confirmed that sales were strong in December. John Pallante, senior director at The Mark Company, the firm in charge of The Austin’s marketing, believes that units will continue to sell at their current pace.
According to a December 2017 San Francisco condominium market report by Polaris Pacific, The Austin is approximately halfway sold out, at 53 units in contract, with an average monthly absorption of 5.2 units. The report states that the studios, which are between 400 and 475 square feet, are selling around $600,000, or around $1,500 per square foot. Junior one-bedrooms, which are between 550 and 684 square feet are selling for around $700,000, or $1,273 per square foot. One-bedroom units, which are between 736 and 780 square feet are selling for approximately the same price, or around $951 per square foot, while the two-bedrooms are selling for around $1.3 million, or $1,529 per square foot. These units are from 850 to 1,075 square feet in size.
The figures in the report account for all the units in the property, including below-market-rate units. When taking into account just the market rate units, the figures escalate. For instance, Austin’s market rate one-bedrooms range from $696,000 to $1,200,000, or $1,362 per square foot.
The sales team sees the pace of sales continuing into 2018, given the local market dynamics. “We do not see hesitancy nor a slower pace for 2018,” explained Pallante. “The Bay Area is still extremely supply-constrained, and we see 2018 as a strong year for real estate in San Francisco. We anticipate first-time homebuyers to be more active in 2018, leading to a greater demand.”
Currently, The Austin’s units are selling at a similar rate compared to other similarly priced condominium developments in the area. Rockwell, a 260-unit complex located nearby at 1634 Pine Street, began actively selling its residences in April 2015 and only recently sold out.
The Harrison, located at 201 Harrison Street, began selling its 298 units in April 2016 at a slightly higher price point and has sold 127 of its residences, less than half of its available inventory according to a trend sheet released by The Mark Company in November 2017.
As its residential units continue to sell, The Austin also has plans to lease its three commercial condominium spaces on the first floor. The spaces range from 600 square feet to 1,100 square feet. Only one tenant has been confirmed thus far; the Community Benefits District will use one of the commercial condominiums for five years as part of a joint initiative between Pacific Eagle and the City of San Francisco to renovate the alley adjacent to The Austin. The space will be used as an art gallery.
While the other two spaces do not yet have tenants, Fisher says the goal is to find tenants who will contribute to the neighborhood in a meaningful way. “We have yet to determine what the spaces will be, but the general idea is for them to really sit well within the neighborhood and be useful for residents above and neighbors next door and around the corner,” said Fisher.