Urban Housing Group Sees Relatively Strong Leasing Rates at Strata at Mission Bay 

Run Date: March 27, 2009

By Erika Schnitzer, Associate Editor
Multi-Housing News

San Francisco—Urban Housing Group of Palo Alto, Calif., a subsidiary of The Marcus & Millichap Company, is on track to lease 25 units per month at its recently opened Strata at Mission Bay, a 192-unit mixed-use luxury community that includes 10,000 sq. ft. of ground-level retail.

Despite the recession, the San Francisco market has shown strength in its occupancy numbers, with many properties maintaining 90 percent rates, Dan Deibel, vice president of development for Palo Alto-based Urban Housing Group, tells MHN. Since the Strata’s opening two weeks ago, Urban Housing Group has leased 20 units, which Deibel notes is on par for a rate of 30 units this month alone.

Mission Bay is a 303-acre redevelopment project that will include 6,000 housing units—rental and for-sale, affordable and luxury—a 500-room hotel, five million sq. ft. of office space and 50 acres of public park space at build out. Additionally, Deibel notes, “since the plan was put together in the late ‘90s, California and San Francisco have decided to build a new $1.5 billion hospital” that will include a children’s hospital, a women’s hospital and a cancer center.

The site’s key component is its 43-acre life science research campus for the University of California, San Francisco.  According to Deibel, the research and tech sectors are “the lifeline of San Francisco in this economy, because there are still companies wanting to relocate to San Francisco to be close to them.”

Strata at Mission Bay is the first development to open on Fourth Street, the city’s first street in decades to be added to the existing grid. “The long-term plan is to create a neighborhood district, similar to a lot of districts in San Francisco—such as the Fillmore, Chestnut Street and Union Street—that tend to be a component of the neighborhood that everyone gravitates toward,” explains Deibel.

Deibel notes that 2 to 3 percent of the San Francisco apartment market is comprised of a condo shadow supply, resulting in a loss of rent growth for the Strata’s opening. Consequently, Urban Housing Group is offering residents the choice of one month free or free parking for the term of the lease. Monthly rents at the Strata range from $2,100 to $4,000, which is approximately 10 percent lower than they would have been one year ago.

The transit-oriented Strata at Mission Bay is located within a half-block to the SFMTA’s (San Francisco Municipal Transportation Agency’s) Muni T-Line, which provides easy access to the city’s Central Business District, and is in close proximity to Caltrain Station, which is the commuter train that runs between San Francisco and San Jose. In addition, Strata provides only one parking space per unit to encourage biking and public transportation among residents.


Designed by San Francisco-based SB Architects, Strata offers eight floor plans, including one- and two-bedroom units, as well as 10 two-story townhomes for rent. Residences range in size from 650 to 1,250 sq. ft. and feature nine-foot ceilings, granite countertops, in-unit washers and dryers, and expansive windows that provide unobstructed views of San Francisco Bay, the City’s skyline, the Bay Bridge and AT&T Park. Many units also include private outdoor space.¨

Deibel notes that Urban Housing Group wanted to create a sense of community with its amenity package, which includes a large clubhouse building within a 20,000-sq.-ft. resort-style landscaped interior courtyard that features a fitness center, resident lounge with demonstration kitchen, theater, outdoor fireplaces, seating areas, bocce courts and a sundeck. “When we designed this building, we really wanted to create a destination,” Deibel says.¨

¨The Strata is the second Urban Housing Group project in Mission Bay. Edgewater, a 193-unit apartment community, was leased and sold in May 2008 to United Dominion Realty Trust for $595,855 per unit.

Mission Bay’s Fourth Street could be its fast lane

Run Date: March 20, 2009

by J.K. Dineen
San Francisco Business Times

Residents moving into the Strata at Mission Bay have bocce courts and barbecue pits, twinkling downtown views and a 24-hour gym.

But as the first renters took up residency in the 192-unit apartment complex this week, one small detail was missing: Fourth Street, the brand-new boulevard leading to the Strata, is still closed as construction crews wrap up the final touches. Phil Owen, president of Mission Bay Development Group, which is responsible for building the street, said it would open by early April.

“We are just finishing up the sidewalk, striping the streets, going through a punch list,” said Owen.

Strata, at 1201 Fourth St., is the first development to open on what is Mission Bay’s next frontier, a half-mile stretch of Fourth Street going from Mission Creek to the southern edge of Mission Bay at 16th Street. While it is not every day a new street is built in an older city like San Francisco, Fourth Street is especially significant because it was conceived as a central shopping and leisure boulevard for Mission Bay. Planners see it as the neighborhood’s answer to 24th Street in Noe Valley or Chestnut Street in the Marina: a hub of neighborhood commerce tailored to pedestrians and cyclists.

During the Strata’s opening weekend March 14 and 15, developer Urban Housing Group signed 15 leases and had 55 groups tour the property. The developer aims to lease 25 units a month, putting the company on pace to lease the entire building in eight to 10 months, according to Dan Deibel, Urban Housing Group’s vice president of development.

The Strata brings to 723 the number of housing units in Mission Bay South. Bosa Development has 99 units at the Radiance but has put its next phases on hold until market conditions improve. University of California, San Francisco, has completed 431 units of student housing.

Given that it will be a few years until Fourth Street flowers as a shopping and dining strip, Urban Housing Group pumped more money into amenities and common space than they might have otherwise. The Strata has a 20,000-square-foot courtyard with gardens, stretching areas and communal rooms for cooking, entertaining and movie watching. Deibel said it was important to give the building “buzz and cachet” to lure people to a part of Mission Bay that is still only half developed.

“We knew we were going to be south of the channel. And so we gave a lot of thought to creating a destination community here where you come home at night and you feel comfortable with everything you have here,” said Deibel.

The Strata is Urban Housing Group’s second San Francisco development. The developer sold the 193-unit Edgewater Luxury Apartments at 355 Berry St. for $115 million in May 2008 to United Dominion Realty Trust. The $595,855 per apartment price tag was record breaking.

While rents have softened in recent months, the San Francisco apartment community has held up much better than for-sale housing. In particular, the Mission Bay submarket, which includes AvalonBay’s Mission Bay communities and developments like South Beach Marina and Bay Village, all have occupancy rates above 90 percent, Deibel said. Average asking rents are about $3.25 a square foot at the Strata, about 10 percent lower than they would have been a year ago. Units range from $2,100 to just under $4,000 a month.

“We are at market,” said Deibel. “San Francisco had been growing at a pretty good clip, and I’d say the last six months it’s been flat. So we lost six months of the growth we planned. It’s a competitive market, and we will be competitive as well.”

On the retail side, Urban Housing is looking for a white-tablecloth restaurant, as well as other neighborhood-serving retail businesses. Brokers from Cornish & Carey Commercial have been touring the property with restaurant owners and had one deal fairly far along before the economy soured last year.

“Now that the Strata is open, we are looking forward to a lot of positive activity, and certainly the opening of Fourth Street will help as well,” said Marissa Miller of Cornish & Carey. “Once the street is open, tenants will be able to get a feel for how great Mission Bay will be.”

“The Real Story with Colleen Edwards” Debuts on KCBS.com Tuesday, March 17th

Run Date: March 17, 2009

Reuters

ONLINE RESOURCE HELPS CONSUMERS NAVIGATE REAL ESTATE

DANVILLE, Calif.—(Business Wire)—Colleen Edwards, a member of the California Building Industry Foundation’s Hall of Fame, brings more than thirty years experience as a strategist for the homebuilding and land development industries to KCBS.com. Today Edwards, co-founder and CEO of EMC Creative, starts her news and information-filled blog and podcasts, ”The Real Story with Colleen Edwards.”

“Consumers need a comprehensive resource tool to research the many complex issues related to real estate,” said Edwards. “There are so many hot buttons for potential homebuyers, re-sellers and those connected with real estate.”

A fully-integrated blog and podcasts will be on KCBS.com and TheRealStoryBlog.com, presenting frank interviews with industry leaders, current news, interactive features, forums and surveys, in an easy-to-navigate format. On KCBS.com, “The Real Story With Colleen Edwards” can be found under the “Extras” and “Audio” sections of the website.

“Look at the opportunities and challenges in today’s real estate market—economic stimulus, green building, mortgage meltdowns, the credit crunch and foreclosures,” said Edwards. “There’s a tremendous amount of information to absorb. ‘The Real Story’ provides a one- stop resource for consumers to visit for critical information.”

“The Real Story with Colleen Edwards” is supported by an advertising /PR campaign, largely funded by Edwards herself. “That’s how strongly I feel about this partnership with KCBS. It’s a great opportunity to talk frankly about real estate issues that impact thousands of people and the communities that they live in.”

Meet Colleen Edwards

Colleen Edwards is co-founder and president of EMC Creative, one of the West’s premier communication agencies and a leader in strategic marketing for bankers, homebuilders and land use development companies. She was honored in 2003 with the Lifetime Legend Award by the Home Builder’s Association of Northern California recognizing her personal and professional achievements.

Edwards is a cum laude graduate of the School of Journalism, University of California, Berkeley. She is the author of “From Good Market Research to Great Marketing.” Her many contacts within real estate and related industries make her an outstanding resource for The Real Story.