Rincon Center deal continues Beacon's S.F. shopping binge

From today’s SF Business Times comes news of another rental to condominium conversion,

Beacon Capital Partners has agreed to buy both the office and residential components of Rincon Center for an estimated $300 million, continuing Beacon’s astounding spending spree in downtown San Francisco.

The blockbuster deal, which is scheduled to close during the second week in June, totals 757,000 square feet of space in three buildings: 101 Spear St. (Rincon Center One), 121 Spear St. (Rincon Center Two) and 88 Howard St. In addition to more than 500,000 square feet of office, restaurant and retail, the building has 320 rental apartments, which Beacon plans to convert into condominiums.

This is another example of a building that was built as condos initially, but rented by the developer. They have every right to sell the units off at any time, but these folks seem to be looking at the displacement issues and offering a very sweet package for those in the 76 BMR units,

The yearlong sale process has been nerve-wracking for the tenants who rent the building’s 320 apartments, according to David Osgood, president of the Rincon Center Tenants Association. When the Rincon Center was completed in 1988, the 320 housing units on floors seven through 12 were mapped as a condominiums, but have always been rental. The tenants were informed a year ago that the property was for sale and that in all likelihood the new owners would be converting the rental apartments to condos. Osgood said that “the uncertainty takes a toll.”

“I find it deplorable that the building can be converted in this way but there is nothing we can do about it, apparently,” said Osgood. “We just have to take a wait-and-see approach and hope to have a good professional relationship with the new owner.”

While Beacon is primarily a commercial developer and landlord, the company is building new housing in Seattle and Boston.

The property, which includes 76 below-market-rate apartments, is part of the South Beach-Rincon Point Redevelopment area and under the control of the San Francisco Redevelopment Agency. Under a deal hammered out last August between Blackstone Group and Redevelopment, the 76 below-market-rate tenants would be able to buy their units at a price where monthly payments — mortgage, taxes, and HOV — would not exceed 32.5 percent of income. In addition the new owner would be obligated to pay a 5 percent down payment for any below-market-rate tenant who wants to buy their apartment, according to David Sobel, senior development specialist at the redevelopment agency.

Should the below-market-rate tenant opt not to buy or to continue to rent, they are still entitled to the 5 percent down payment.

“Basically they can take the money and run,” said Sobel.

Furthermore, senior or disabled renters would be able to continue to rent if they so choose, according to Sobel, who said the idea was to “minimize displacement.”[more…]

Despite the opportunity that the developers are providing with these BMR units, I’m sure Daly will jump in and make this so difficult or financially unfeasible that the deal will never happen.

Remember, these were originally mapped as condos. They do not have to provide anything outside of current BMR rules, but they are looking to do a very generous thing by providing this opportunity to the current tenants. Let’s hope that Daly sees how good of an opportunity this is for those tenants, and that he finds a way to make it happen. I won’t hold my breath, however.

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6 Responses to “Rincon Center deal continues Beacon's S.F. shopping binge”

  1. Daly should jump in and protect the apartments if they are rent controlled. I would rather kept the current residents of SF than have a bunch of rich SOBs move in a take over.

    Why are you so damn greedy?

    Anonymous at May 31st, 2006 at 5:32 pm ( )
  2. First, why the personal attack?

    Second, why is my hoping that tenants will be able to buy their units directly from a developer with downpayment assistance considered greedy?

    And if Daly prevented these tenants from purchasing their units, how would that be considered a good thing? You want to keep tenants from owning their units?

    And if you do read more of this blog than just this one post, where/how do you see me being greedy?

    If I were greedy, wouldn’t I keep all of this information to myself and my clients?

    And why does someone who works hard and earns the ability to own their home automatically become a ‘rich SOB’?

    How long does someone have to live in San Francisco before they become a ‘current resident’?

    I’ve been here for 9 years and I do not consider myself a local. I am, however, committed to helping San Franciscans own homes and protect their investments, but that should not cause me to earn the title of ‘greedy’.

    So now I might ask you, why are you so afraid of change?

    Matt Lanning at May 31st, 2006 at 7:43 pm ( )
  3. And to comment on your first sentence, the building was completed in 1988, ten years after the rent control deadline. So not only are these condos, but they are NOT subject to rent control. Any building completed after 1978 is exempt from rent control.

    So does that now mean that you would not want Daly to step in an ‘protect the apartments’?

    Matt Lanning at May 31st, 2006 at 7:46 pm ( )
  4. Matt, To some minds the mere ‘wish’ or ‘hope’ to own one’s own home makes a person a rich SOB. Apparently it is much better to accept a fate as a prisoner to rent control; never being able to move to either a nicer apartment or buy a place because its not affordable or economically feasible.

    Do any of the posters that personally attack you sound like they want to have hope; for anyone to have hope? Nope. They want the status quo. They defend the status quo without recognizing its flaws or the inequities it causes.

    These by and large seem to be incredibly negative individuals who think the best way to get their point across is to personally attack you or anyone else that doesn’t agree with them 100%.

    Hmmmm…can you think of a supervisor that behaves in a similar manner by personally attacking those that don’t agree with him?

    CameronRex at May 31st, 2006 at 9:54 pm ( )
  5. Good point…

    And for those who might wonder, Cameron and I have never met, although it appears we share similar values.

    Thanks for your support!

    Matt Lanning at May 31st, 2006 at 10:03 pm ( )
  6. Matt,
    How many of the current residents will be able to buy their units? Just give a guess.

    As far as you being greedy, every belief you espouse is for more housing, something from which you benefit directly. If everyone thought like you, you’d be richer than you already are. Wouldn’t that be great? The funny part is that adding housing does not help sf residents because it actually increases prices.

    So my question stands. Please answer. kk

    kk at June 3rd, 2006 at 4:49 pm ( )

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