Avant Housing breaks ground May 21 on 900 Folsom St., the second of three large San Francisco apartment complexes that the developer is building. Together they will deliver 665 units to the rental housing market starting next spring through the end of the year.
All three of the new developments, valued collectively at more than $250 million, were originated with capital from CalPERS, the California Public Employees’ Retirement System, via the AGI-TMG Housing Partners Fund.
Meanwhile, Eric Tao, development principal for Avant, says he has also begun the entitlement marathon for three additional complexes in the Bay Area, and for the first time, Avant will be looking to Silicon Valley.
“I have been in the area for 19 years, and we really think we understand the young professionals and the young people who are creating the jobs and filling them,” Tao said. “We are nimble and tend to build product that is out of the box, and we are not afraid of entitlement challenges.”
The $120 million Folsom Street project sits on an acre and a half at 5th Street in the South of Market district. It was five years in the making, overcoming initial community opposition to what some perceived as gentrification, said Tao, AGI managing principal.
“It is in western SoMa where it is more industrial historically. This is where the bourgeoisie meets bohemian, and that eclectic tension is what makes San Francisco great,” Tao said. “That tension is what inspires creativity, and that is one of the reasons we were able to get the support of the community.”
Fifteen percent of the 282 units will be affordable to people earning 55 percent of the area median income, which is $95,400 in San Francisco, according to Fannie Mae. The project includes a small public park, and the developers hope to achieve LEED Gold certification from the U.S. Green Building Council. The construction will take 19 months.
In August, Avant expects to start work on its third San Francisco venture, an approximately $70 million project with 181 units at 260 Fifth St. It is immediately north of the Folsom Street site.
Avant is already under construction on a 202-unit, approximately $65 million project at 1880 Mission St. in the city’s Mission district, Tao said.
The Mission neighborhood has gained favor among the technology workers whose talents have drawn a huge influx and expansion of both established and emerging high-tech companies to San Francisco in the last two years. “If you had told someone you wanted to build a class A apartment project of this size in the Mission historically, they would have said, ‘You are crazy,’” Tao said. “We will be the first.”
Buyers already have begun circling, he said. The project is to be finished in April 2013.