The developer is New York-based Millennium Partners, which previously developed the Four Seasons Hotel & Residences at 735 Market. Its equity partners are Morgan Stanley and a local investor group in San Franciso called WTR that has ties back to Hong Kong. The total project cost is $500 million, including $350 million for construction, and the gross sell-out value is north of $900 million.
Richard G. Baumert, a managing partner with the Millennium, tells GlobeSt.com that overall sales to date for Millennium Tower have "surpassed all of our projections" and recently topped $200 million. His goal is to have that total up to $250 to $300 million by the time the building is ready for occupancy, so he can "pay down the construction loan" from HSBC. The longer-term goal is to have all the units sold by late 2011. Millennium's equity partners include a local investor group in San Francisco called WTR that has ties back to Hong Kong, and Morgan Stanley.
Designed by Glenn Rescalvo of Handel Architects, the 645-foot tower and an adjacent 11-story mid-rise building will comprise a total of 419 residences, including one, two and three-bedroom units ranging in size from 750 sf to 6,000 sf. The units are divided in the three strata--Residences (lower floors, main tower), City Residences (mid-rise building) and Grand Residences (upper floors, main tower)-- each of which has its own lobby, elevators and staff. The $2-million sales center is located at 450 Mission St. The asking prices range from $700,000 to well more than $10 million, with the overall average price per sf coming in at around $1,500, Baumert says.
Amenities will include a private concierge and exclusive access to a 20,000-sf Club Level featuring an owners' lounge, tasting room and cellar, private dining room--serviced by the on-site restaurant-- screening room, children's playroom, an outdoor terrace, and a 5,500-sf fitness center complete with Pilates and yoga studios, massage therapy, locker rooms, Jacuzzi and steam rooms, as well as a 75-foot, indoor, competition-length lap pool set beneath a soaring skylight. The development also will have 7,800 sf of street-level retail for two occupants, one of which will be "an upscale dining establishment under the direction of one of the city's outstanding chefs."
Most of the sales to date have been higher-end units, Baumert says. There are four penthouses on the top two floors that will be delivered as raw space and four units on the 58th floor that will be delivered as finished units. The four finished units on the 58th floor sold at an average price of $1,900 per sf. One of the 4,000-sf, unfinished top-floor penthouses sold for $2,288 per sf, which may be a local record, he says. Sales of the units on the lower floors will come in due time, he says.
"There are a lot of interested people but no sense of urgency right now; since they can't move in tomorrow, there's no rush," Baumert says. "I think as the [economic] news gets better, that will be one good push [for sales] and once the building opens we will get a big pop."
The four-year sales schedule should give the market plenty of time to absorb not only Millennium Tower but the two other high-rise residential towers that recently opened, One Rincon Hill and Infinity. The units in those building will compete on price with the units in the lower floors of Millennium Tower, says Baumert, who is confident Millennium Tower's standard level of finish and amenity package will stand out amid the crowd.
"Our 20,000-sf club-level floor, that is best the thing we've ever done," he says. "We've got the best amenity package of any res building on west coast and when people can touch it, that will be a real big boost."
The last time Millennium Partners opened a high-rise condominium tower into a down market in San Francisco, things turned out just fine, Baumert says. That was the Four Seasons Hotel & Residences, which opened in 2001. Pre-sales were brisk in 2000 and the 136 units were completely sold out when the dot-com crash and 9/11 rolled around.
"We lost a good amount of contracts but ended up selling out 18 months later at a little more than $1,100 per sf," Baumert says. "That same product, six years later, is approaching $2,000 per sf if you are fast enough to grab one when they come up for resale. It was a rough neighborhood but now it's changed. The Ritz Carlton is across the street and the St. Regis is around the corner."
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