"The condo market on the San Francisco Peninsula hasn't experienced the gross overbuilding that has occurred in the East Bay and parts of Oakland, where they are suffering from a glut right now," Watson says. "But I expect they will all be absorbed in not too long [a period] and our project will take 24 to 27 months to build, so we won't even be delivering units to consumers until summer 2010; we are confident that by then the condo market for really the entire Bay Area will be very healthy."

San Bruno is located 12 miles south of Downtown San Francisco, halfway to the Silicon Valley. Crossing at San Bruno is a 20-acre development located within walking distance of both BART and Caltrain, and one mile from San Francisco International Airport.

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. In partnership with MacFarlane Partners, which was investing on behalf of the California Public Employees' Retirement System, they broke ground for the first two phases in January 2003.

The trio has since 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. Archstone invested an additional $7 million to finish the project.

SNK acquired the land for phase three from TMG and Regis in late 2005 and partnered with MacFarlane in May 2007. The equity MacFarlane is providing SNK for the final phase is coming from MacFarlane Urban Real Estate Fund II LP, a closed-end, commingled real estate 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.

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 averaging 1,200 sf. The apartment building will have one- and two-bedroom rental units averaging 900 sf that have been mapped for an eventual condo conversion. Amenities include a pool, interior courtyard and fitness center for each building. Watson wouldn't disclose the per-sf pricing they hope to achieve on the condos but says the market rate for new apartments is north of $2.75 per sf.

SNK will handle the condo sales and the apartment lease-up and management in-house through SNK Pacific Coast and SNK Property Management, respectively. A sales center for the condos is expected to be up and running on or next to the development site by February 2010.

When the third phase is complete, the Crossing will feature more than 1,000 residential. On additional phase is planned to include a hotel and 20,000 sf of retail and restaurant space.

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 that was completed and sold in 2001; The Franklin 88, an 88-unit condominium property in Downtown Oakland completed in 2004 and sold out in 2005; and Andante, a 125-unit condominium project in Emeryville that was completed and sold out in 2006.