Residential sale: Stonestown and the Villas Parkmerced

Another from today's SF Business Times,

San Francisco's blistering residential real estate market led to two immense transactions in 2005, including one of the largest apartment deals ever on the West Coast.

The Villas Parkmerced sale, at around $700 million, is a San Francisco record for an apartment complex. The other important deal was the sale of Stonestown Apartments. While considerably smaller, at around $156 million, it is significant because it could lead to a major expansion of San Francisco State University.

The Business Times Real Estate Deal of the Year contest judges voted for the two neighboring projects to share the top award.

At 3,221 units on 115 acres near Lake Merced, The Villas Parkmerced has been a residential landmark in San Francisco for more than a half century, built in the years after World War II for returning veterans.

It sold for $324 million in 1999 when Leona Helmsley unloaded it to Carmel Properties. Carmel invested considerably to upgrade the property and at the height of the market found investors willing to pay a premium. Over a dozen bidders, some from overseas, took a run at it, but a partnership of New York's Stellar Management and Rockpoint Group was victorious. Stellar is a major holder of New York apartment buildings and is making its first foray into California. The project is subject to the city's rent-control program and can't be converted to condominiums.

The Stonestown deal was driven by SFSU's need for more on-campus housing and significantly grows its campus to 134 acres from 106, a coup for the smallest campus in the state's 23-university system.