Trophy Development Site at 41 Tehama in San Francisco Hits Market for the First Time

Colliers International has been retained as the exclusive marketing agent for 41 Tehama, a fully entitled residential project designed and approved for 341 units, located in the Transit Center District of San Francisco. The site is owned by Tehama Partners, LLC.  Colliers International’s Investment Services Group, which includes Tony Crossley, Frank Wheeler, Tim Maas, and Erik Hanson, will market the site on behalf of ownership.

The luxury residential project was LEED-designed by Arquitectonica and will feature 31 floors with stunning 360 degree views, an expansive outdoor plaza, fitness center, clubroom, rooftop solarium, ground floor retail space, and three floors of subterranean valet parking.

Located just two blocks from the under construction $4.7 billion Transbay Transit Center, 41 Tehama Street boasts an incredible, urban infill location in the center of an area rapidly becoming the core of downtown San Francisco. 41 Tehama Street represents the increasingly rare opportunity to acquire a fully entitled high-rise residential development site in the most rapidly transforming area of downtown San Francisco. The Project is poised to benefit from the tremendous infrastructural development in the immediate area, excellent access to the downtown core and public transportation, and the continued demand for luxury residential product in San Francisco.

“This is an excellent opportunity for a developer to acquire a first-class, fully entitled residential development site in the future core of San Francisco” said Tony Crossley, Executive Vice President.

About Colliers International
Colliers International is the third-largest commercial real estate services company in the world, with over 12,300 professionals operating out of more than 520 offices in 62 countries. A subsidiary of FirstService Corporation (NASDAQ: FSRV; TSX: FSV and FSV.PR.U), it focuses on accelerating success for its clients by seamlessly providing a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and research. Commercial Property Executive and Multi-Housing News magazines ranked Colliers International the top U.S. real estate company. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.

Hines Plans First Apartment Development in San Francisco

Houston-based Hines in a joint venture with Atlanta-based Invesco Real Estate is planning the development of the 410-unit 41 Tehama development in downtown San Francisco. The address is located just two blocks from the Transbay Transit Center, which has been the epicenter of development activity in San Francisco for a while now.

“We are very excited that this project will be our first apartment development in San Francisco. We have successfully developed apartments in other major markets around the country,” says Paul Paradis, a senior managing director for Hines, who works out of the company’s west regional office in San Francisco located at 101 California Street.

Hines/Invesco paid $50 million to acquire the development site, according to sources that are aware of the transaction. The seller was Tehama Partners, LLC, which had owned the site for long time; it has first placed the site for sale in April of last year. It sold the site through its listing agent, the San Francisco office of Colliers International. Hines declined to comment on the acquisition price for the site. Invesco did not return phone calls or respond to e-mails for this story.

Invesco is planning to invest capital into the 41 Tehama project as a build-to-core investment strategy for one of its commingled funds, according to sources who are aware of the development. “I would expect that at some point in the future we would put some construction debt on the property,” said Paradis. He would not reveal the total development cost of the project.

Hines is planning to break ground on the project during the first quarter of next year and expects the development to be completed by the end of 2016. “We think that San Francisco is creating very strong job growth, and we should be able to attract many employees working for companies in the city as tenants in our project,” said Paradis.

The development will have a small retail component and a parking garage. The retail totals 1,000 square feet, which has yet to be leased and will likely be a coffee shop or some other retail used to serve the renters in the apartment complex. The project has plans for three levels of underground parking totaling around 250 spaces.

The apartment complex will have 85 percent market rate units and 15 percent of those are slated to be affordable. There will be many shared amenities in the project that will attract technology workers and young professional employees. There will be a place for the tenants to give their dog a bath, for instance, while a portion of the complex will be set aside for tenants to store and conduct maintenance work on their bicycles. The top floor of the complex will have a club room. It will include a fire pit and a library.