Dental school condos may top $10 million

Rendering of The Pacific, now under construction at Webster and Sacramento.

The Pacific, now under construction at Webster and Sacramento Streets.

By CHRIS BARNETT

When the developers and designers of The Pacific were hunting for inspiration and ideas for San Francisco’s plushest and priciest condominium complex, they looked east and heavenward.

The team transforming the former University of the Pacific dental school at 2121 Webster flew to New York and swarmed over 96-story 432 Park Avenue, Manhattan’s tallest residential building, where full-floor penthouses a quarter-mile in the sky are selling for up to $95 million.

A squadron of local executives and architects also looked into the 82-story Four Seasons Hotel and Residences under construction in New York’s eternally hip TriBeCa neighborhood, where the asking price for a modest 1,500-square-foot two-bedroom condo on the 60th floor is $5 million. And they  checked into boutique hotels including the five-star Bulgari in London and Milan to see firsthand how moneyed and discriminating guests are pampered.

But they didn’t stop there. Trumark Urban, The Pacific’s builder-developer in the estimated $158 million venture, and financial partner Hillmark, chaired by Dallas property magnate Ross Perot Jr., pored over a list of San Francisco’s most successful residential real estate brokers and invited 50 of the top producers to join a board of advisors.

At an invitation-only cocktail party at Spruce restaurant on Sacramento Street and in a follow-up detailed questionnaire, Trumark Urban mined a mother lode of informational nuggets and advice on what the city’s wealthy and worldly would like to see — and might buy — in an opulent Pacific Heights condominium building.

Trumark Urban’s curating, wooing and polling is a first for a developer, according to several brokers on the advisory board. “In my experience in San Francisco, no one has ever reached out to us as a group and asked for our advice and feedback,” says Nina Hatvany, a broker with Pacific Union who was San Francisco’s number one residential sales agent from 2008 to 2013.

Trumark Urban also pitched The Pacific to the San Francisco Housing Action Coalition and got an endorsement and a rave review.

“It met our guidelines squarely,” says the group’s executive director Tim Golen. “It’s smart growth, smart urbanism and a terrific addition to a part of the city that doesn’t get much new housing. I must say Trumark Urban really gets it.”

But the real stroke of marketing genius came when Trumark Urban’s velvety-smooth managing director Arden Hearing gave the Pacific Heights Residents Association’s board of directors a show-and-tell of what he planned to create in their backyard. While homeowner groups are historically the natural enemy of developers, Trumark Urban got the red carpet treatment.

“They made a presentation to us on exactly what they were going to do early on, and as their plans changed, they came back and gave us an update,” recalls Greg Scott, president of the group. “We think it’s a great addition to the neighborhood. We need housing. We need more off-street parking. We think the merchants will be thrilled.”

Yet many important details of The Pacific are still unknown. No one, including the broker advisory board members, has seen renderings of the floor plans, examples of the finishes, a complete list of amenity costs or a price sheet for the homes, including the monthly homeowner’s fee.

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So far, only the basics of the project have been unveiled. Among them: The dental school building and land was sold to Trumark Urban and Hillmark for $50-something million. The partnership beat out two dozen other developers that wanted to convert the prized property and its prime location into office buildings, rental apartments and other mixed uses, says Daniel Cressman, executive managing director of Newmark Knight Cornish & Carey’s San Francisco office, who orchestrated the school building sale for University of the Pacific.

The dental school, which has roots dating back to 1896, when it was known as the College of Physicians and Surgeons of San Francisco, has been relocated to a new campus in a former Crocker Bank data center at 155 Fifth Street that Cressman found.

Trumark Urban and San Francisco’s Handel Architects will create a total of 76 large condos with 12- to 14-foot ceilings. The main building, with two new floors on top, a glass and steel facade and four levels of secured underground parking with 100 spaces, will house flats and triplexes of one, two, three and four bedrooms ranging from 1,096 to 3,136 square feet — plus up to four 3,625-square-foot penthouses.

The school’s outdoor parking lot will become the landscaped and terraced site of 10 three-bedroom, 2,301-square-foot attached garden townhouses with private back yards that will reportedly look faintly Victorian to blend in with the neighborhood.

The Pacific’s promoters also promise an array of amenities, services and features — including a fitness center opening onto a private yoga garden. A personal concierge, a valet and a private security detail can be ordered. And the staff will include doormen, a building concierge and parking valets — expenses to be covered by the monthly homeowner’s fee.

A fact sheet on the complex spells out a resident’s lounge described as a “quiet hideaway that opens to a terrace of landscaping, outdoor fireplaces.” A separate business lounge and a furnished hospitality suite will be available for residents and guests who want the equivalent of a hotel conference room for brainstorming and entertaining.

Another fact is also certain: There will be no units for low-income buyers at The Pacific. The city offers new housing developers three options: Price 12 percent of the homes in the complex at below market rate; build a larger percentage at some other location; or make a 20 percent contribution to the Mayor’s Office of Housing to help the city build affordable housing. Trumark Urban opted to donate the 20 percent and will reportedly write a check for $5.2 million to the city.

Paul Wermer, a former director of the residents association, says Trumark Urban got off cheap. “The developer had a wonderful opportunity to make this space unique with inclusionary housing,” says Wermer, who is now a member of the Japantown Task Force. “But now the developer is contributing a financial load of the cost to build that is vastly less than if it was 20 percent of the value.”

Construction, which started in August, will not be completed until 2016 and sales will not start until June 2015.

Trumark Urban is in no hurry. The longer it takes, the bigger the payday as buyer demand for luxury housing continues to drive sale prices skyward.

The Mark Co. just released its closely watched condominium price index claiming the cost of new high-end condos rose 16 percent in a year and jumped 4 percent to $1,170 per square foot from September to October. Even parts of the city that are not considered prime locations are fetching towering prices.

Tishman-Speyer, for example, which is building the massive four-building, 656-unit Lumina luxury high-rise condo project South of Market — with a long list of enticing amenities including valet parking and a monthly homeowner’s fee of around $1,000 — is commanding a selling price of up to $2,000 per square foot, with more than 100 sales already buttoned up.

The Pacific has gone through various incarnations and the final design has still not been cast in concrete, says Hearing. “In our original studies, we had as few as 60 and as many as 120 units, but we’re at 76 now. Our current plan calls for four penthouses, but we’re thinking of combining them to two.”

While a certain amount of carping is always expected when change disrupts a neighborhood, The Pacific’s ceremonial groundbreaking last month was a lovefest, with city officials, developers, architects and many of the chosen brokers swinging sledgehammers at chunks of interior walls as flutes of champagne were proffered and canapes passed.

Attendees at the groundbreaking were bullish about the new condominium project and willing to chime in on the guessing game of who the ultimate buyers might be.

“There are people who love the Fillmore and don’t want to live downtown,” says Lynn Sedway, a real estate specialist who, with her husband Paul, left the neighborhood and bought a condominium above the Four Seasons Hotel on Market Street. They’ve since moved back to the neighborhood.

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Paul Sedway, a retired urban planner, sees The Pacific as a magnet for youngish technology executives, venture capitalists and private equity firm higher-ups who have hit it big in the markets or via a buyout. He says another group of potential buyers is people over 60 who prefer to be close to the neighboring medical offices and hospital — just in case.

Coldwell Banker residential broker Rohulla Habibi, who sits on the Trumark advisory board, expects all-cash foreign buyers to find The Pacific a discreet, desirable address.

Trumark Urban has hired Polaris Pacific, which is also peddling condos for a handful of other new and planned condo projects in the city, as its sales and marketing rep. However, the 50 advisory board members have been promised a “first look” pre-sale for their clients and prospects before Polaris can jump in with its marketing firepower.

The hand-picked army of brokers might be their own best clients.

“Every realtor who is involved in this project wants to buy in there,” says Caroline Werboff, an agent with Sotheby’s International Realty. “Realtors are talking about buying units for themselves,” adds Barbara Callan, who with her son Robert Callan Jr. forms a sales team for McGuire Real Estate.

Nevertheless, the mystery still surrounding The Pacific is off-putting to some. “They have elevations but we don’t know the configurations, no one has seen the floor plans or samples of the finishes. No one has seen anything in print,” contends Werboff. “They asked for our input, but they never gave us feedback on their decisions. It’s mysterious, but it’s on purpose.”

Overall, advisory board brokers seem to agree The Pacific, when completed, will be San Francisco’s trophy residential address. Observes Hatvany: “The location is great — close to Fillmore Street, not some sterile South of Market environment. They were careful to provide larger units,” she says. “And the views are lovely — they’re not bridge to bridge, but some units have views of the Golden Gate and the bay, and you also look over urban and landscaped park scenes that are very attractive. Plus, they have thought about desirable amenities. So unless they make a mistake on the interior finishes, they will have done everything right.”

Callan also says she “doesn’t see any negatives” in recommending The Pacific. “They are taking their time and carefully planning everything. It’s sort of like the Millennium Tower, where you have luxury living,” she says, referring to the 60-story condo building South of Market. “And here you have a neighborhood feeling,” she adds.

Werboff is a bit more skeptical. She says she and some other brokers are concerned that “San Francisco is becoming the next New York City and these prices could really be out of sight.”

If the sampling of brokers is correct, The Pacific, with its 76 homes and sharply escalating demand for a regal, how-may-we-serve-you lifestyle prices for some units, could shatter the city’s record for newly constructed condominium homes: $3,000 a square foot. Or higher.

  • Rainforester

    So horrific!!!!!