(Read more on the multifamily market.)
SAN BRUNO, CA-SNK Realty is moving ahead with the third phase of the Crossing at San Bruno, a 20-acre mixed-use development across from Shops at Tanforan, a 1.1-million-sf retail center. The third phase will be a two-building, 350-unit multifamily development. To make it happen, Phoenix-based SNK has tapped locally based MacFarlane Partners, which invested in the first two phases on behalf of the California Public Employees' Retirement System.
Unlike the first two projects, which were pure apartment projects, phase three will include 187 condominium units and 163 apartment units in two five-story buildings that will sit atop subterranean parking. Construction of the $170-million phase is expected to begin this fall and wind up by summer 2009. A future phase is slated to include a hotel and 20,000 sf of retail.
San Bruno is located halfway between San Francisco and the Silicon Valley. TMG Partners and Regis Homes of Northern California acquired the surplus Navy property from the US General Services Administration at an auction in 2000 as part of a redevelopment deal with the city and first broke ground in January 2003. The property is located within walking distance of both BART and Caltrain, and one mile from San Francisco International Airport.
Regis Homes, TMG Partners and MacFarlane Partners sold the first two phases--the 300-unit Meridian Luxury Apartments and the adjacent, 185-unit Paragon Luxury Apartments--to the Colorado-based apartment REIT Archstone-Smith Trust. Archstone paid $101.2 million for the larger project in December 2005 and three months later paid $65.1 million for the smaller project, which was under construction. It invested an additional $7 million to finish the project, which was scheduled for completion this spring.
SNK acquired the land for phase three from TMG and Regis in late 2005. The equity MacFarlane is providing SNK for the final phase is coming from MacFarlane Urban Real Estate Fund II LP, its newly formed, closed-end real estate commingled fund focused on development, redevelopment and repositioning projects. SNK Development, the construction and development arm of SNK Realty, will manage the development of the property on a day-to-day basis.
SNK Realty chief executive Hal Watson says market conditions on the Peninsula remain favorable for both condominium and apartment development. "There is a thriving employment base here, a need for housing, and a growing population enjoying proximity not only to San Francisco, but also to San Jose and other parts of the Bay Area," he says.
The phase-three design is the work of HDO Architects-Planners. The condominium building will feature one- and two-bedroom flats, and two- and three-bedroom townhomes. The apartment building will have one- and two-bedroom rental units but has been mapped for an eventual condo conversion. Residential unit sizes are estimated to range from 700 sf to 1,800 sf. Amenities include a pool and a fitness center for each building.
SNK Realty has completed three other Bay Area developments since 2001. Those projects include Allegro at Jack London Square, a 310-unit apartment project along Oakland's bayside; The Franklin 88, an 88-unit condominium property in Downtown Oakland; and Andante, a 125-unit condominium project in Emeryville.
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