Multifamily Mania
From micro to market rate to everything in between, a housing boom has hit SF. How long can it last? What are the biggest projects coming down the pike? The key players? What are the sources and terms of financing? Where are the opportunities for you? Answering these questions is why we're excited to host our 4th Annual Multifamily Summit Oct. 29 at the Intercontinental. Networking starts at 7:30am and the program at 8:30am. Please join us!
Panoramic Interests' Patrick Kennedy, the developer behind the micro-housing project delivering at the corner of 9th and Mission next June, is also a speaker. (Above, celebrating the topping off of its 12th floor.) The project will contain 120 microstudios and 40 microsuites, or two- and three-bedroom apartments. Patrick tells us S.F. in the 21st century resembles 19th -century London because it's a cradle of innovation and economic dynamism. New industries, businesses, and opportunities abound—which translates to jobs and the need for housing. Hence the boom.
Panoramic is its first high-rise micro-apartment project in S.F., and the company is close to securing a site for a large low-rise version, he tells us. He's also working on two micro projects in Berkeley. The Nexus (above), a 70-unit micro-housing concept a third of a mile from Berkeley's campus, just got design/review approval.
Mayor's Office of Economic Workforce Development project director Sarah Dennis-Phillips, who's speaking, breaks down why a new two-bedroom apartment can rent for more than a whopping $4,200/month. S.F. now employs more people than at any other time in our history, she says. The “back-to-the-city” movement has influenced population growth in urban areas like here, Boston, and NY in the past decade, fueled by new waves of arrivals from other parts of the country and fewer urbanites decamping for the suburbs.
In recent years, that movement has been amped up by job growth (S.F.'s unemployment rate is half of what it was in 2011, at 4.7%). Tech has created over 23,000 jobs in that timeframe, and the tech sector is responsible for over 52,000 more new jobs in other sectors. After years of underbuilding, we are unable to meet the demand for housing. And the result of pent-up demand is high prices.
Sarah's one of the main point people addressing the problem. She's currently managing the Mayor’s Housing Working Group, a group of housing experts and advocates working to address the city’s housing shortage and housing cost escalation. The group will be issuing a series of recommendations to increase production and affordability in early November, she tells us. She's also acting as project director for major public-private development projects like Forest City’s Pier 70 project (above).
HKS Architects' Brendan Dunnigan says amenities are huge: His project Azure at Mission Bay has a shared demo kitchen, a pet-wash station, fire pit and parks on three sides (and incredible Bay views). The housing market is so hot because the job market is hotter. He moved to S.F. from LA for a better job and salary 11 years ago. The influx continues across all job sectors, but especially tech and social media. To meet the housing demand for years to come, we need meaningful reform of the 40-year-old environmental law, CEQA. There’s common ground to be found that will satisfy all parties, he says. It’s about smart growth and creating livable communities.
MacFarlane Partners managing director Dirk Hallemeier has three active projects here in S.F. MacFarlane is excited about West Coast markets for multifamily—S.F. in particular. Seattle and LA are only slightly behind in terms of attractiveness, mainly due to job growth, high-paying jobs, and being desirable places to live. His company is now delivering its first new apartments in four to five years because of obvious reasons. MacFarlane Partners recently delivered 1844 Market (Venn on Market, below), which is now fully leased up. A few blocks away in Midmarket at 1125 Market, a 160-unit project that hasn't been named yet is in the planning and entitlements process. Dirk's in the midst of construction on a project in Marin with 180 units, expected to deliver mid-2015.
Dirk expects to have entitlements in hand for 1125 during Q2 and start construction by early 2016. He has a history going into micro markets or neighborhoods that are changing and turning over. When he first stuck MacFarlane's toe in Midmarket, the ball was already rolling on revitalization, with NEMA under construction. He looked hard at the AAA building, but Emerald Fund got it instead to redo into units. Emerald Fund chairman Oz Erickson is also a speaker at Bisnow's Multifamily Summit on Oct. 29 at the Intercontinental. Register now!
