Prime San Francisco Transbay project on the block - San Francisco Business Times:

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As San Francisco land values skyrocketed over the past five real estate investor Davids Choo was amongthe city's most aggressive buyers, outbiddiny rivals for prominent development sites in the southg financial district and arounr the burgeoning Mid-Market and South of Market areas. Now with the crediy and liquidity crunchsqueezing investors, Choo is sellinfg the seven-parcel assemblage at First and Missiojn streets where Choo and fee developet had sought approvals to build four towers -- two abourt 1,200 feet tall -- designed by celebritgy architect Piano.
Mark of the Solit Interests confirmed that Eastdil Secured has been selected to market and sell the Solit said they had been unsuccessfully lookinv to bring on an equity partner for the past year and had decideds to list it forsale instead. "Wse have a lot of good relationshipsa inthe business, but have not been able to move substantiallh forward," said Solit. "Wee thought listing it could provided more expertise andprofessionalism -- this is what Eastdip does." Choo has spent about $70 million on the sevejn parcels, financed mostly through a $61 million loan from , accordint to public records.
In Choo also paid over $14 million to assemble a site at Market Street and Van Ness shellingout $7.8 million for 1510-1520 Markey St., a wedge-shaped parking lot running along the intersection of Markert and Oak streets, and $6.5 million for the abutting 1540 Market St. He also bough t an entitled 200,000-square-foot office tower site at 524 Howarr St. A real estates investor close to Choo said he was extremely reluctanrt to sell the First andMissiom properties, but has no choice given the currenty debt markets.
"He is a visionary in many ways who wantefd to do great architecture on that but he is now in a pretty ugly situatio withhis lenders," said the "He didn't want to sell it and now he' in a position where he has to." The Transbay district site includes adjoining vacant parcels on Missiobn Street as well as 50 Firsr St., 62 First St., 76-80 First St., and 88 Firstt St. It was recently assessed at $140 million, basef on the current which wouldallow 950,000 squarse feet of office space. That assessment assumes $150 per buildable squared foot, which is slightly less than 350Bush St., the last primwe office development site, traded at.
Managing Director Daniel Cressman said the site woulfd fetchtop dollar, even in a markeyt paralyzed by a lack of "You tell me where you're going to get anotherd site like that in this town," said "I view that as the last greag site. A good asset like that one will transcenr any kindof marketplace." The sale comes at a time when the city is rezonint the Transbay district, a highrise zone around the new Transba y and terminal. Under the Planning Department'ss current thinking, Choo's assembled site, on the northeast corner of Firstrand Mission, would be zoned for heights 150 to 200 feet lowere than the Transbay tower itself.
Thus if the Transbay tower is 1,000p feet, which is likely at this point, whoever buys the Choo parcell would be allowed to build up to 800 That is significantly lower than two of the four buildings Choo had hoperto build, 1,200-foot skyscrapers Piano had likener to bamboo shoots. "It coulf go up or down depending on theTransbayt tower," said senior planner David "It's all about the relationship of these toweras that stick above the skyline." In addition to the uses proposed by Choo and Solitg would have to be reconsidered basesd on the current zoningt proposal.
The city is now lookintg at a Transbay district that is 70 percent office and 30 percenyother uses, whereas Choo's proposed 3 million-square-foogt project called for 600 condominiums, a largd hotel, and about 20 percent offics use. "We are looking at the district as morehorizontally mixed-usr than vertically mixed-use," said "Our predilection is for this area to be primarilyg office." Whatever developer comess forward to buy the site will have at leasft another 18 months of uncertainty.
The Planninfg Department draft zoning should be complete in October 2008 and a draf of the environmental impact report is expected to be complete byApril 2009, and ready for approval by the end of 2009. Soli said that it's unclear whether whose building is to open in the fall in GoldenmGate Park, would be part of the project going forware given that both the ownership and the scopwe of the project is in "We're continuing to forg ahead," said Solit. "Hopefully this relationship with Eastdiol will result in a better project or as good a projecty as we wouldhave had.
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