South San Francisco might stand as a shining beacon on a hill — or rather, several hills — for multifamily construction in the Bay Area.
The Peninsula city is bucking a trend of lagging apartment starts in the region with three large-scale residential projects underway. The latest proof of confidence from a lender came last month when Trammell Crow Residential secured a $183 million construction loan for its 480-unit Alexan Icon project at 1587 and 1588 San Mateo Avenue.
Two other large apartment developments have also broken ground in South San Francisco. Syres Properties is developing 400 units at 410 Noor Avenue while Essex Property Trust is building nearly 550 units at 7 South Linden Avenue.
“It’s significant that South San Francisco has three large multifamily developments underway,” Nell Selander, economic and community development director for the city of South San Francisco, told the San Francisco Business Times.
Nationwide and across the Bay Area, construction starts for apartment projects are at their slowest pace in 15 years, Jesse Gundersheim, senior director of market analytics at CoStar, told the Business Times.
Farther south in Sunnyvale, a 147-unit apartment complex sold for nearly $70 million, pointing to possible increased demand for already-existing housing in Peninsula cities south of San Francisco.
The 5-acre Citra apartment complex sale marked a more than $40 million profit from its 2014 price of $27 million. The property sold to San Francisco-based Prime Finance for $68.5 million, or about $466,000 per unit, higher than the five-year average multifamily property price in Santa Clara County of about $458,000 for such developments.
San Francisco rents bounce back post-pandemic
Five years on from the pandemic, rents in San Francisco have nearly recovered all losses.
Median rental prices for two-bedroom apartments in San Francisco have surpassed levels from before the pandemic’s outbreak, according to a new report from Zumper. Last month, two-bedrooms in the city climbed to a monthly median listing price of $4,780, marking the highest point since August 2019. Median rents for one-bedrooms are close to reaching the same threshold at $3,400 per month, just under the $3,500 rate pre-pandemic.
An influx of new tech workers, likely driven by the proliferation of artificial intelligence company offices in the city, played a key part in the recent increase, according to Zumper spokesperson Crystal Chen. That sentiment is shared by AvalonBay Communities COO Sean Breslin, who told investors in May that return-to-office mandates improved public safety and AI-driven job growth has increased housing demand — and as a result, rents.
San Mateo skyline poised for transformation
San Mateo could soon claim a new tallest tower in the city.
Mike Field of Mecah Ventures has filed formal permits to build a 14-story building at 1 East 4th Avenue in downtown San Mateo. The tower is projected to stand at 202 feet tall, edging out an office complex across the street at 400 South El Camino Real, also 14 stories tall but 165 feet high.
Plans call for 174,700 square feet of housing and 119,760 square feet of commercial space with subterranean parking for 171 cars and 283 bicycles. The building would boast ground-floor retail, housing on the lower 10 floors, and offices on the top four floors with access to a rooftop balcony.
Of the 236 rental units planned, 36 would be deed-restricted as affordable housing. Residents would have on-site amenities like a private lounge, spa, fitness center and a golf simulator.
If approved, the structure wouldn’t be the tallest building in San Mateo County. That title belongs to the 317-foot-tall Genesis North Tower in South San Francisco, though N17’s proposed 458-foot-tall building as part of its Willow Park mixed-use development in Menlo Park could beat it out.
Nvidia plants flag at Mission Rock
Mission Rock is set to receive another major tenant: the world’s most valuable company.
Nvidia is reportedly in talks to lease 45,000 square feet in the eight-story office building at the site in Mission Bay, joining Coinbase and the Golden State Warriors at the tower.
As the company’s value balloons past $4 trillion, the Santa Clara-based chipmaker has been growing its footprint in the Bay Area. This year alone, it dropped $123 million for a 10-building office campus across the street from its Santa Clara headquarters and additionally bought a 500,000-square-foot, four-building office complex in the South Bay city.
The move has been in the works for some time, as the company was reportedly looking for a 30,000-square-foot sales office in San Francisco in May, according to the San Francisco Chronicle.
Nvidia CEO Jensen Huang is doubling down on San Francisco, home to artificial intelligence giants OpenAI and Anthropic, saying the city is “thriving again… all because of AI.”
The AI sector is expected to gobble up 21 million square feet of offices and attract as many as 60,000 new employees to San Francisco over the next five years, according to a report from CBRE.
Saratoga winery to become cemetery
Savannah-Chanelle Vineyards in Santa Clara County is headed for a spooky redevelopment.
Longtime owners Michael and Kellie Ballard sold the 57.9-acre winery outside Saratoga to the Saratoga Cemetery District for $20 million.
The cemetery manager has been preparing to expand in the area. In April, the district bought a house next to Madronia Cemetery for $4.5 million. But the district has had its eye on the Savannah-Chanelle land for some time.
“This is the one we’ve always wanted,” Steve Albright, general manager of Madronia Cemetery, told the San Francisco Business Journal of the vineyard purchase. “We’ve been working on this one for about a year.”
The Saratoga Cemetery District will spend the next 20 years paying off debt to secure the property as it prepares to turn the nearly 60-acre plot into another cemetery. The winery won’t be going anywhere for a while, though; the Cemetery District is leasing the property to Savannah-Chanelle, which will continue to operate for at least the next 10 years before the cemetery takes over and redevelops the land.
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