Trumark Urban to Build 6 Condo Communities in San Francisco
Trumark Urban sees opportunity as supply of for-sale units dwindles; condo developments will offer exciting urban lifestyle in city’s unique downtown neighborhoods.
Trumark Companies announced today a major move into San Francisco’s underserved condominium market with the launch of Trumark Urban. The new division has acquired six sites in the city’s urban core for mid- and high-rise condominium communities with plans in the works for more than 500 for-sale units. The portfolio represents a commitment of investment exceeding $300 million with the first project expected to break ground in early 2013.
As the economy has rebounded, urban housing has been in high demand for months, especially along the coast, said Trumark principal and co-founder Gregg Nelson.
“But almost all the housing that’s been created has been rental housing,” said Nelson. “We see an exploding opportunity, and an exploding demand, for for-sale housing in core urban areas because there’s almost a complete lack of supply.”
Trumark Urban’s managing director, Arden Hearing, said the six sites are exceptional in terms of transit access, walkability to restaurants and shopping, local appeal, individuality and potential for bringing dramatic improvement to the surrounding area.
“We want to take great places and make them better,” said Hearing.
In Nob Hill, for example, Hearing envisions turning a dilapidated auto repair shop into a high-rise condominium community with commercial/retail on the ground floor and perhaps a public-private art gallery in the alley.
“We want to bring life to the street – revitalize areas in great San Francisco locations that are already right next to jobs, services and restaurants,” he said.
A November report on San Francisco housing inventory illustrates the dearth of condominiums in the pipeline. New condominium construction is expected to be minimal from 2012 to 2015, the Polaris Group reported in its November 2012 analysis of San Francisco real estate. In fact, available new condominium inventory is forecasted to be less than 200 units per year from 2012 through 2015, the report states.
“For a city of over 800,000 residents, such low inventory is fairly remarkable,” said Nelson.
“Trumark Urban will debut in San Francisco because of strategic reasons,” says Michael Maples, who co-founded Trumark with Nelson in 1988. “First, there is a movement of tech companies choosing to locate in San Francisco over Silicon Valley. Second, a large portion of the young tech work force is choosing to live in San Francisco, even if it means commuting to Silicon Valley. And thirdly, we are seeing more move-down baby boomers choose to maintain a residence in highly amenitized urban areas.”
“All these groups appreciate the rich amenities found in cities – walkability to entertainment, cultural events and transit. All this at a time when people are, once again, recognizing the value of buying verses renting,” Maples said.
In the past two years, housing prices have increased more than 10 percent in San Francisco, said Jason Kliewer, partner and chief investment officer of the firm who is responsible for all aspects of land acquisition, neighborhood planning and entitlement processing.
“Because of the rebounding housing market and ongoing creation of high-paying jobs in the Bay Area, we feel our footing is strong,” Kliewer said.
Trumark’s Vice President of Sales and Marketing, Mark Higgins said that condominiums will range in size from 500 to 1,500 square feet, depending on the location. The portfolio includes higher-end homes over $2 million as well as approachable market-rate housing under $500,000.
“We are looking at various amenities that appeal to this unique buyer, including personal bicycle-storage and tune-up facilities, onsite community art galleries, shared-vehicle parking and innovative outdoor spaces and uses,” Higgins said.
Trumark Urban is an offshoot of Trumark Homes, which has raised more than $140 million in equity for single-family residences in suburban areas. Trumark Homes currently has 2,000 lots in pipeline in Northern and Southern California and “will continue to expand that brand,” Nelson said.
Trumark Urban has a different focus, he said. “We’ve put together the opportunities, and we’re aligning ourselves with equity partners who see the opportunity the way we do.”