Right now it's Kent Swig. But Swig Burris Equities LLC, the company set up to develop the project, is facing a $20-million-plus default on the estimated $173-million project. Phone calls to company's San Francisco offices were not returned for comment. A ground-breaking ceremony for the project was held in March of 1999, but construction has yet to begin.
"The general market will look positively on any project," according to Jeff Mishkin, a first vice president with Marcus & Millichap's San Francisco office who spoke with GlobeSt.comrecently. "Given the size and uncertainty of the market, in the event Swig cannot complete it and it does, in fact, go back to the lender, it is likely that there will be others right behind Swig looking to snap it up and move forward to develop the property."
The future of the Swig development is all about math, says Mishkin. "When you actually break it down there is the cost of construction, land and building so lenders are looking at the income that must be derived from the market in order to make it viable. The big question is with today's rents and where they are going and that is a bit uncertain."
Mishkin adds there are some great lessons and parallels with the Century and previous South Beach developments. "In the 90's, the same thing happened in South Beach. There were several apartment building going up and it was a new area and many of them did not have an easy go of it and I think one or two faced a similar situation," says Mishkin. "But now they are doing marvelously so, it can happen. But you have to build up support and look at the long-term market. In times of uncertainty it's hard to raise equity and the funds to build a development like this and so it really takes some deep pockets to pull it off."
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