By Jon Peterson
Seattle-based Columbia Pacific Advisors has made the decision to place up for sale a residential development site in San Francisco’s Mission district located at 2675 Folsom Street, according to sources familiar with the project. This potential offering for the property will be among one of the first “short sale” assets in the current cycle in San Francisco.
Columbia Pacific has been involved with this asset for several years. The firm had provided a $15 million loan on the property after San Francisco-based Axis Development paid $18 million to acquire the property in 2015.
Since then, however Axis had run into some financial issues with the project, as stated by sources that are aware of the circumstances surrounding the development, which have made it impossible for the development to move forward in its present form. The problems included increased construction costs that have plagued the industry across the region in recent years. But, the other hurdles were presented by Calle 24 Latino Cultural District, a local organization that demanded increased affordable housing allocation in the project or another site where an eight-unit affordable project could be built. The original plan for the development called for a total of 23 affordable units.
The organization successfully lobbied for the increase, and those conditions will have to be accepted by the buyer of the site in order to move the project forward.
These factors have led to Columbia Pacific taking over the site and looking for a buyer for the entitled project. The listing agent on the sale is the San Francisco office of JLL., which is represented in the deal by Stephen Jackson, senior vice president, and Joe Owens, vice president. JLL declined to comment when contacted for this story.
2675 Folsom is a fully entitled site, and permits could be granted as early as December of this year, with construction starting soon thereafter. The development would be built over four stories and have a total of 117 units. The types of units in the property would be a mixture of 24 studios, 46 one-bedroom, 45 two-bedroom and 2 three-bedroom apartments. Some of the amenities in the project would include a resident lounge and theatre, indoor fitness center, full outdoor kitchen and dining area and 174 bicycle spaces.
The property as it stands now is occupied by three 25-foot tall two-story warehouse and storage structures totaling 21,599 square feet with surface parking and storage areas. The existing buildings were first constructed in 1952 and are now the home to a restaurant supply warehouse.
2675 Folsom has good access to public transportation. It is estimated that it is a seven-minute walk to the BART station at 24th Street.