By Nancy Amdur
Although newlyweds Ryan and Angela Lyles both work in San Francisco, they did not consider moving into the city when they began looking to buy their first home.
“We didn’t even bother looking,” said Angela Lyles, 26. “We thought, ‘Well, we can’t afford that, it’s just too expensive.’”[contextly_sidebar id=”Z5Oiz93sj8AlKDOFelP76fn3UPjbH0Es”]But when they found a two-bedroom townhouse at Lennar Urban’s new San Francisco Shipyard development in the city’s Bayview neighborhood, it was within their price range.
It was an opportunity “to buy a really well-equipped townhome at a price that [was] roughly half of what the current market rate per square foot is in San Francisco,” said Ryan Lyles, 27.
The move provided the space they wanted and also shaved their current 2.5-hour each-way commute from Morgan Hill to a 15-minute shuttle ride to their jobs at a technology company in downtown San Francisco.
“It was a pretty easy decision for us to make and a very approachable one financially,” Ryan Lyles said.
The price tag might be a factor that helped spur the rapid sellout of the first 88 residences released in the multibillion-dollar development, which eventually will comprise about 5,800 homes and 265 acres of parks.
“We had an overwhelmingly strong response,” to the homes, said Sheryl McKibben, the vice president of sales and marketing at Lennar Urban, a division of Miami-based national home builder Lennar Corp.
Prices ranged from the mid-$400,000s to the $900,000s for the residences, which included 63 one-, two- and three-bedroom condominiums at the Merchant, 451 Donahue St., designed by Ian Birchall and Associates, and 25 townhomes at the Olympia, 501 Donahue St., by BDE Architecture Inc. Units range from 500 to 1,500 square feet.
Lennar Urban this week announced the presales of the second round of condo and townhome units, comprising 159 residences priced starting in the low-$500,000s for a one-bedroom condo.
The company already has a list of people preapproved for its next group of homes.
“We have the market on our side,” McKibben said. “People need housing in San Francisco, and we are filling a portion of the market that is really difficult, which is affordable housing.”
“People who thought they were completely priced out of the San Francisco market and could never buy here are able to get into the market at the Shipyard,” she added.
It is difficult to find a one-bedroom housing unit in the city for under $700,000 or $750,000 in most other locations and there is “almost nothing” in San Francisco under $500,000, said Alan Mark, founder and president of The Mark Company, a San Francisco residential marketing and sales firm that is overseeing the branding and design of the Shipyard and its sister community Candlestick Point, also being developed by Lennar Urban.
Sales at the Shipyard’s first townhouses and condos averaged $650 per square foot, McKibben said. The average price for new condos citywide was $1,257 per square foot during March 2015, according to research by The Mark Company.
The approximately $8 billion Shipyard and Candlestick Point projects will span 762 acres and feature 12,000 homes along with more than 300 acres of parks, 3 million square feet of commercial and 885,000 square feet of retail space.
By 2020, about 1,500 homes will be completed at the Shipyard, and both projects should be complete around 2027. Residences will be a mix of townhomes, low-, mid- and high-rises designed by various architects to avoid giving the master-planned community a “boring” look, McKibben said.
“There will be a full variety of different home types and age groups and affordability across the two properties,” she said.
About 32 percent of the homes will be reserved for affordable housing, including 60 units by Agoura Hills, Calif.-based AMCAL Multi-Housing scheduled to open next year. Also, St. Louis-based developer McCormack Baron Salazar recently started construction on the Alice Griffith development, which calls for rebuilding 256 units of existing public housing and adding 249 affordable residences.
While Bayview is a historic waterfront neighborhood on the city’s southeastern edge, the nine-mile stretch where Lennar Urban’s projects will be was a former naval shipyard and does not have all the amenities—such as restaurants and accessible transportation—which people associate with urban living.
It already offers “breathtaking” water and city skyline views, though, McKibben said. Additionally, a daily shuttle service for residents stops in neighborhoods such as the Mission, Dogpatch, South of Market and the Embarcadero.
Because the development’s amenities are still under way, Lennar Urban priced the homes at a value compared to the city’s more established neighborhoods.
“It’s going to become a city within the city and have everything that people are looking for. But people have to say, ‘I’m willing to get in now and wait a while for all the amenities to be there, [and] I get to buy at this value to be able to do so,’” McKibben said.
So far, about 62 percent of the Shipyard’s buyers work in the city, more than half are married and half are between 34 and 48 years old. They also are in diverse industries, such as health care, finance and education, Mark said.
Location and price attracted buyers, McKibben said.
“Three sides of it are surrounded by water, it’s the sunny part of the city and the views are amazing,” McKibben said, adding that it also is three miles to downtown and seven miles from the airport.
“It was a mixture of the quality, the views and the feeling of this is a whole new neighborhood within Bayview being created,” Mark said.