Kaiser,2121 Third St.
Dogpatch laps up real estate investment
The spread of investment from Mission Bay south into the Dogpatch neighborhood is picking up speed.
With the $80.4 million, 196-unit Potrero Launch set to open up this summer at 2235 Third St., another developer is about to start demolition to clear a site for a 105-apartment rental project a block away at 2121 Third St. Costa Mesa-based Mission Piers Development LLC is the developer.
The six-story building, designed by Sternberg Benjamin Architects, will cost $29.4 million to construct, according to the city permits. The developers bought the property for $6.9 million, according to the Old Republic Title Co.
The site belonged to the San Francisco Petroleum Co., which had four 30,000-gallon tanks on the site, said Gary Cohen of TRI Commercial. Cohen had the property in contract for six years, during which time he brought the housing project through the approval process and found a buyer for it. “It was a kind of ugly site on the waterfront so everyone is happy to see it go,” said Cohen.
The property was in limbo for three years during the rezoning of the Eastern Neighborhoods when it was unclear what the city would allow to be built there.
Ultimately, Cohen said, the delay was probably a good thing, as project approvals were won just as the rental housing market caught fire and construction kicked off on the $1.6 billion University of California, San Francisco Hospital a few blocks away.
“It was the perfect time and the perfect location — near Mission Bay, near the new UCSF Hospital,” said Cohen. “It was a sweet spot in terms of location and entitlements and piggybacking on all the progress in the surrounding neighborhoods.”
Architect David Sternberg said the design takes advantage of the parcel’s location near the water on Illinois Street. The U-shaped form features double-loaded corridors with half the units facing Illinois Street — and the Bay across the street — and half opening onto an interior courtyard on the Third Street side. The units along Illinois Street are patterned in a “saw-tooth” design to allow for maximum light and water views.
The project — a mix of brick, wood panel and fiber cement integral color panels — will also be across Illinois Street from Crane Cove Park, a seven-acre green space that is being built as part of the redevelopment of Pier 70.
“That guarantees open space right across the way which is going to be really nice,” said Sternberg.
Sternberg said he thinks a number of other new proposals will be introduced along Third Street this year.
“There is still a lot of under-utilized industrial land along the Third Street corridor. This is going to be the extension of Mission Bay, and Mission Bay is already seriously built up and populated,” he said.
The 2121 Third St. development comes as two large-scale Dogpatch projects are in the early stages of the approvals process. Kaiser Permanente is in contract to acquire a piece of land along 16th and 17th streets, just southwest of Mission Bay and plans to build a roughly 200,000-square-foot medical office building there as part of a mixed-use development.
In addition to the medical office building, Walden Development, which owns the land, is seeking approval of 200 units of housing. Under the proposed scenario, the site — now occupied by the office moving and storage company Corovan — would be divided into two parcels, with the Kaiser building on one portion and the residential project next door.
And the San Francisco Opera is in contract to sell its sprawling set-construction warehouse at 800 Illinois St. to apartment giant Archstone for approximately $26 million.
Archstone has filed a preliminary application to build 350 units on the property there. Archstone is working on the entitlements with Build Inc., the group that built the pioneering Dogpatch project, the Homes on Esprit Park, a block north.
J.K. Dineen covers real estate for the San Francisco Business Times.
Build, Baby, Build: Newest Dogpatch Development Would Bring New Housing Units Total to 1,000
Avant Housing is set to buy a 67,000 sq. ft. site at 1201 Tennessee Street, with plans to build 300 units on the property. The spot is currently home to a gas station, some warehouses, and a Chinese restaurant. The purchase is still early in the development phases, and if approved, will bring the total of new housing units in Dogpatch over 1,000.
Two other projects in the area have started getting their approvals – a new Kaiser Permanente medical office building along 16th and 17th streets with 200 units of housing, and Piers Development LLC is starting demo for a 105-apartment project at 2121 Third Street. Also on contract is the sale of the San Francisco Opera’s storage warehouse at 800 Illinois Street to Archstone, who is looking to build 350 units on the site. Couple those with the 196-unit project at 2235 Third Street which is set to open in early fall, and quick math adds that up to a potential 1150 new units of housing, all within 7 blocks. Some neighbors are concerned about the sudden influx of housing, saying new residents will create a need for more parks, schools, and public transit — none of which are planned for in the near future. We can’t wait for the drama at future approval hearings.