By Jon Peterson
Chicago-based T2 Capital Management has put on the market for sale the development site located at 399 Fifth Street in San Francisco. The parcel has the potential to bring a sales price of $12 million, according to sources familiar with the property that is offered. The property last traded in June of 2016, when the current owner purchased the site for $8 million.
The seller has hired the San Francisco Bay Area operation of CBRE Capital Markets to be the listing agent on the sale. The people involved on the sale are Michael Taquino and Kyle Kovac, both executive vice presidents, Mandy Lee, vice president, and Ginacarlo Sangiacomo, senior associate. CBRE declined to comment when contacted for this story.
The development site could be turned into a residential asset in the future. If the new ownership takes that approach, the development could be for a property covering 10 stories and a total of 129 units. The project is suited for either apartments or condos, according to sources familiar with the property. The site itself covers 0.26 acres, and the developers would be able to take advantage of the California State Density Bonus in order to bring it to that size.
The site has a strong location. It is within walking distance to major tech employers, such as AirBnb, Adobe, Pinterest and Stripe in SoMa and Uber, Square and Twitter in the Mid-Market neighborhood. It is also one block away from the future Central Subway stop at 4th and Folsom Streets.
New apartment projects over the last five years overall in San Francisco have been well received. Vacancy among these new projects currently are at 4.5 percent, since the new apartments are leased up to near full occupancy shortly after completion. Average rents have continued to climb, increasing 4.8 percent in just the last 12 months.
San Francisco is a housing market that is severely under-built, and it has not keep up with the job and population growth over the last decade. In 2018, San Francisco welcomed more than 14,000 new additions to the labor force. This compares to just 2,263 new housing units that were constructed during that time period.