SAN FRANCISCO–Financing for the ground-up development of a residential condominium and retail building located at 645 Texas St. has been provided to a joint venture between Trumark Urban, the mixed-use development arm of Trumark Companies, and Hillwood as the equity partner. PCCP LLC provided the $48 million senior loan for the project.
Construction is anticipated to begin in summer 2015 with completion anticipated for late 2016. The fully entitled project, Knox, will consist of 91 condominium units with 625 square feet of ground-floor retail and 67 subterranean parking spaces in the amenity-rich Dogpatch/East Potrero Hill neighborhood near downtown. The condo units will include one- and two-bedroom units as well as three-bedroom penthouse units–a rare feature for the neighborhood. Communal spaces and locally sourced artwork, including a water feature created from a reclaimed bridge, will decorate the development's interior.
Arden Hearing, managing partner with Trumark Urban, tells GlobeSt.com:
“Knox is an exciting new project, located in a fast-growing and unique San Francisco neighborhood. We designed it to work for today's San Francisco residents, who are busy professionals and families that want a comfortable home with a strong sense of community. While we are still finalizing our retail partners, we know they will enhance the community and living experience at Knox.”
San Francisco's residential market is significantly under-supplied and is in the midst of a multi-year bull market that is due to a surging tech employment market and very favorable owner supply/demand dynamics. To make way for the condos on the in-fill site, the two vacant warehouse buildings currently occupying the plot will be demolished.
Erik Flynn, managing director with PCCP, tells GlobeSt.com:
“The specific location within San Francisco, the strong San Francisco housing market as a whole, and the ability to lend to an experienced local developer were the real strengths of this loan.”
The condo development will have direct access to Interstate 280, 22nd Street Caltrain, 3rd Street T-Line Muni, Espirit Park and the future Pier 70 waterfront development. Major employers, including UCSF Medical Center, Uber and Old Navy, have campuses located approximately 1.25 miles north of the property.
“This investment gives PCCP the opportunity to originate a senior construction loan for a project in an improving San Francisco neighborhood. Trumark and Hillwood's experience in high-density, urban development and knowledge of the area will provide a much-needed offering in a supply-constrained market for residential condo product,” Flynn concludes.
Earlier this month, another residential condo loan was provided by Grosvenor Americas for projects in the Dogpatch neighborhood at 815 Tennessee and 2290 3rd Streets.
Trumark Urban develops condos in core urban neighborhoods close to jobs, transit and local businesses. Founded in San Francisco in 2011, the division has a projected total revenue in excess of $1 billion. Since its inception in 1998, PCCP has raised, invested and managed approximately $10 billion of institutional capital through a series of investment vehicles including private equity funds, separate accounts and joint ventures.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
