Hines Plans First Apartment Development in San Francisco

Hines, San Francisco, Investo Real Estate, 41 Tehama, Transbay, San Francisco apartment, Bay Area news, real estate, development, construction
41 Tehama_San Francisco The Registry real estate
A rendering of the project at it was marketed by Colliers International in 2013

By Jon Peterson

Houston-based Hines in a joint venture with Atlanta-based Invesco Real Estate is planning the development of the 410-unit 41 Tehama development in downtown San Francisco. The address is located just two blocks from the Transbay Transit Center, which has been the epicenter of development activity in San Francisco for a while now.

[contextly_sidebar id=”nE1hgFiRj6HXKq14awKS3SgifpRMJoJS”]“We are very excited that this project will be our first apartment development in San Francisco. We have successfully developed apartments in other major markets around the country,” says Paul Paradis, a senior managing director for Hines, who works out of the company’s west regional office in San Francisco located at 101 California Street.

Hines/Invesco paid $50 million to acquire the development site, according to sources that are aware of the transaction. The seller was Tehama Partners, LLC, which had owned the site for long time; it has first placed the site for sale in April of last year. It sold the site through its listing agent, the San Francisco office of Colliers International. Hines declined to comment on the acquisition price for the site. Invesco did not return phone calls or respond to e-mails for this story.

Invesco is planning to invest capital into the 41 Tehama project as a build-to-core investment strategy for one of its commingled funds, according to sources who are aware of the development. “I would expect that at some point in the future we would put some construction debt on the property,” said Paradis. He would not reveal the total development cost of the project.

Hines is planning to break ground on the project during the first quarter of next year and expects the development to be completed by the end of 2016. “We think that San Francisco is creating very strong job growth, and we should be able to attract many employees working for companies in the city as tenants in our project,” said Paradis.

The development will have a small retail component and a parking garage. The retail totals 1,000 square feet, which has yet to be leased and will likely be a coffee shop or some other retail used to serve the renters in the apartment complex. The project has plans for three levels of underground parking totaling around 250 spaces.

The apartment complex will have 85 percent market rate units and 15 percent of those are slated to be affordable. There will be many shared amenities in the project that will attract technology workers and young professional employees. There will be a place for the tenants to give their dog a bath, for instance, while a portion of the complex will be set aside for tenants to store and conduct maintenance work on their bicycles. The top floor of the complex will have a club room. It will include a fire pit and a library.

Rendering by steelblue for Fritzi Realty courtesy of Colliers International

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