(Read more on the multifamily market.)
SAN FRANCISCO-A $95-million mixed-use development got started last week on 1.5 acres near the University of California in the Mission Bay neighborhood. The project, 555 Mission Rock, is a 192-unit apartment development with 10,000 sf of street-level retail located south of the channel, an untested area for market-rate apartments.
The developer is a joint venture of AIG Global Real Estate and Urban Housing Group, a multifamily development subsidiary of Marcus & Millichap Co. A source with Urban Housing Group tells GlobeSt.com that the $95-million figure represents to project's total development cost.
The eight-story project will consist of one- and two-bedroom units, a limited number of townhouse units and the ground floor retail space. Completion is two years out. UHG says it won't have a clear idea of the asking rental rate for the units until the project is approximately 18 months from completion.
The unit sizes will range from 630 sf to 1,300 sf. Unit amenities will include granite counter tops, maple cabinets, broadband wiring, in-unit laundry facilities and nine-foot ceilings. Shared amenities include a lounge and demonstration kitchen, a fitness center, a business center and an eight-seat theater.
The designer is SB Architects of San Francisco. The general contractor is Nibbi Brothers Construction. Construction financing is being provided by JP Morgan's Real Estate & Lodging Investment Banking Group.
Urban Housing Group president Jim Brooks tells GlobeSt.com there are for-sale condominiums being developed in the area by Bosa Development, but there is no rental product yet. "North of the channel is a much more mature market," Brooks says. "We're doing a little bit of market making."
Without anything in-market to compare to, Brooks isn't ready to say what can be achieved in the way of rental rates. North of the channel, where Urban Housing Group is finishing Edgewater, a 193-unit development, rental rates for market-rate product is $2,400 to $2,500 per month for a 700-sf to 800-sf apartment. Brooks' project north of the channel, however, is wood-frame construction over a two-level concrete base, while its south-of-the-channel project is on a smaller site that required the more expensive type-one construction.
The upside is there are new office and lab buildings being developed there, adjacent to the University of California at San Francisco, and the city and developers are trying to create a neighborhood feel with lots of ground-floor retail space to capitalize on the student population as well as a growing number of office and lab workers.
"While [south of the channel] might not be as mature from a housing perspective, the area will allow for a lower density, mixed-use character that will be appealing," he says.
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