4 ms·

Wait so I can get a huge office building for the cost of three mediocre single family homes?

inferiorhuman 2y ago
Turn that on its head: what kind of huge office building is only wroth $6 million? A really crappy one. Based on personal experience with that building I'd rather have 3x SFH.
- Lammy 2y ago
  It's the location — 6th & Market (well more like 6th & Jessie) is the roughest block in the city. Rougher than anywhere in the TL.
  - inferiorhuman 2y ago
    The entrance (and thus the address) is on Market – 995 Market. It sits between Market and Stevenson. Jessie is a block closer to Mission, and yeah 6th and Mission has a reputation. It's zoned for mixed use (although the donut shop on the ground floor left years ago and I'm pretty sure that space has been vacant for a few years). It's in between Powell and Civic Center stations. It's a pretty decent location, with some great food and entertainment near by although the fancier restaurants closed ages ago. It's basically across the street from the Golden Gate Theater and the Warfield. The neighborhood is what it is. IKEA and their new, popular, food hall is less than a block away. Looks like there's some hipster dofus AI incubator right there too. The building itself just wasn't well maintained. Last I saw you were far more likely to get trapped in the elevator than mugged.
    - Lammy 2y ago
      > The neighborhood is what it is. I did go out of my way to describe it as “roughest” and not “worst”. Least compatible with the image of perfection projected by the typical tower-dwelling corpo? :) In fact I have a lot of fond memories from the mid-2010s of stopping by the weed lounge on Jessie for a Volcano bag and a few floors of Isaac Rebirth on my PSVita any time my afternoon train was significantly delayed. Alas that just closed too for the same reason: https://sfstandard.com/2024/02/02/san-francisco-cannabis-dispensary-bloom-room-closes/ https://sfstandard.com/2024/02/02/san-francisco-cannabis-dis...
  - foolfoolz 2y ago
    going from sixth and market down to mission st is quite a walk
  - deleted 2y ago
    [deleted]
shrubble 2y ago
What are the taxes per year?
- srockets 2y ago
  Because of the infamous prop 13, commercial real estate taxes in California are in practice capped at 1980s valuations.
  - toast0 2y ago
    A foreclosure auction is an ownership transfer that triggers a reappraisal. So this building will likely see a big jump (unless it had an uncapled appraisal recently). Most likely the appraised value will be more than the foreclosure sale price, as a foreclosure sale doesn't meet the free market value conditions. The sale was forced, and buyers don't have time to complete due dilligence between the announcement and the sale.
- inferiorhuman 2y ago
  Around 2% of the sale price in perpetuity.
hibikir 2y ago
In downtown St. Louis, ATT tower sold for half of that, right there in the middle of downtown. Sold for 200 million in 2016. So, if we go by office buildings that have sat unoccupied for a while, SF is still maintaining good value.
acchow 2y ago
You can’t. They also assumed the debt against it
- tarikjn 2y ago
  I am not sure this is the correct take, they happened to have assumed the debt prior. But the building was sold independently for this price at a public auction. They had to do this to find the fair value of the building to deduct it from the debt. You could have bid 6.57M and won if no one bid after. Now they own the building and the remainder of the debt.
toast0 2y ago
My understanding is this was a foreclosure auction and that the lender bought it (but I'm not actually sure if it was the lender, because articles are saying it was the 'special servicer). At California foreclosure auctions, my understanding is the lender will usually bid up to the loan balance or their estimate of what they can sell it for with some marketting and time. That it sold for $6M to the lender tells you that nobody was prepared to make an offer on it given the time constraints, not that the fair market value is $6M. The lender will operate it and prepare it for sale and buyers will be able to take their time to do due dilligence etc, and most likely it will sell for somewhat more than $6M. The purpose of a foreclosure auction include clearly establishing a change of ownership. If the lender pursued judicial foreclosure and a deficiency judgement, the fair market value will be litigated some time after the sale, and the borrower may need to make up the difference between the loan balance and fair market value.
dehrmann 2y ago
You don't want to see the utility and maintenance bills for a building like that.
- kioleanu 2y ago
  it's just water and gas Michael, how much could it cost?

Turn that on its head: what kind of huge office building is only wroth $6 million? A really crappy one. Based on personal experience with that building I'd rather have 3x SFH.

Lammy 2y ago
It's the location — 6th & Market (well more like 6th & Jessie) is the roughest block in the city. Rougher than anywhere in the TL.
- inferiorhuman 2y ago
  The entrance (and thus the address) is on Market – 995 Market. It sits between Market and Stevenson. Jessie is a block closer to Mission, and yeah 6th and Mission has a reputation. It's zoned for mixed use (although the donut shop on the ground floor left years ago and I'm pretty sure that space has been vacant for a few years). It's in between Powell and Civic Center stations. It's a pretty decent location, with some great food and entertainment near by although the fancier restaurants closed ages ago. It's basically across the street from the Golden Gate Theater and the Warfield. The neighborhood is what it is. IKEA and their new, popular, food hall is less than a block away. Looks like there's some hipster dofus AI incubator right there too. The building itself just wasn't well maintained. Last I saw you were far more likely to get trapped in the elevator than mugged.
  - Lammy 2y ago
    > The neighborhood is what it is. I did go out of my way to describe it as “roughest” and not “worst”. Least compatible with the image of perfection projected by the typical tower-dwelling corpo? :) In fact I have a lot of fond memories from the mid-2010s of stopping by the weed lounge on Jessie for a Volcano bag and a few floors of Isaac Rebirth on my PSVita any time my afternoon train was significantly delayed. Alas that just closed too for the same reason: https://sfstandard.com/2024/02/02/san-francisco-cannabis-dispensary-bloom-room-closes/ https://sfstandard.com/2024/02/02/san-francisco-cannabis-dis...
- foolfoolz 2y ago
  going from sixth and market down to mission st is quite a walk
- deleted 2y ago
  [deleted]

shrubble 2y ago

What are the taxes per year?

srockets 2y ago
Because of the infamous prop 13, commercial real estate taxes in California are in practice capped at 1980s valuations.
- toast0 2y ago
  A foreclosure auction is an ownership transfer that triggers a reappraisal. So this building will likely see a big jump (unless it had an uncapled appraisal recently). Most likely the appraised value will be more than the foreclosure sale price, as a foreclosure sale doesn't meet the free market value conditions. The sale was forced, and buyers don't have time to complete due dilligence between the announcement and the sale.
inferiorhuman 2y ago
Around 2% of the sale price in perpetuity.

hibikir 2y ago

In downtown St. Louis, ATT tower sold for half of that, right there in the middle of downtown. Sold for 200 million in 2016. So, if we go by office buildings that have sat unoccupied for a while, SF is still maintaining good value.

acchow 2y ago

You can’t. They also assumed the debt against it

tarikjn 2y ago
I am not sure this is the correct take, they happened to have assumed the debt prior. But the building was sold independently for this price at a public auction. They had to do this to find the fair value of the building to deduct it from the debt. You could have bid 6.57M and won if no one bid after. Now they own the building and the remainder of the debt.

toast0 2y ago

My understanding is this was a foreclosure auction and that the lender bought it (but I'm not actually sure if it was the lender, because articles are saying it was the 'special servicer). At California foreclosure auctions, my understanding is the lender will usually bid up to the loan balance or their estimate of what they can sell it for with some marketting and time. That it sold for $6M to the lender tells you that nobody was prepared to make an offer on it given the time constraints, not that the fair market value is $6M. The lender will operate it and prepare it for sale and buyers will be able to take their time to do due dilligence etc, and most likely it will sell for somewhat more than $6M. The purpose of a foreclosure auction include clearly establishing a change of ownership. If the lender pursued judicial foreclosure and a deficiency judgement, the fair market value will be litigated some time after the sale, and the borrower may need to make up the difference between the loan balance and fair market value.

dehrmann 2y ago

You don't want to see the utility and maintenance bills for a building like that.

kioleanu 2y ago
it's just water and gas Michael, how much could it cost?