real es­tate

San Fran­cisco is un­der­go­ing a prop­erty frenzy driven by the tech sec­tor and Chi­nese cap­i­tal, writes Stephen Short

Hong Kong Tatler - - Contents -

Chi­nese cap­i­tal and the tech sec­tor are driv­ing the San Fran­cisco mar­ket wild

Per­haps it was just a mat­ter of time. Af­ter all, San Fran­cisco’s Chi­na­town is the largest out­side Asia and the old­est in North Amer­ica. It’s also Bruce Lee’s birth­place and home to the Chi­nese Hospi­tal, built by Tung Wah Dis­pen­sary in 1925. Now some of China’s most pro­lific de­vel­op­ers—china Vanke (US$81.8 bil­lion in as­sets) and Gem­dale (US$21.9 bil­lion)—are in­vest­ing heav­ily in San Fran­cisco high-rise sites.

At the top of the lad­der, soar­ing above the water­front at the epi­cen­tre of cul­ture, tech­nol­ogy and in­no­va­tion, is Lu­mina, on Main and Fol­som streets. A two-tower project of 656 mod­ern res­i­dences, it fea­tures a one-of-a-kind du­plex pent­house de­signed by Bernardo Fort-bres­cia of Arqui­tec­ton­ica. The curvi­lin­ear con­fig­u­ra­tion cap­tures iconic views of city land­marks such as the San Fran­cisco Bay Bridge, the Ferry Build­ing and the down­town financial dis­trict. Lu­mina’s backer is China Vanke.

The du­plex pent­house—at US$49 mil­lion, the most ex­pen­sive prop­erty of its kind in San Fran­cisco—fea­tures dra­matic, dou­ble-height liv­ing rooms of shim­mer­ing walls of glass in two lo­ca­tions. The down­stairs space com­prises five en­ter­tain­ing rooms, while up­stairs re­side five en-suite bed­rooms, a gym/mas­sage room and a fam­ily lounge. With 360-de­gree views, this glass palace cap­tures the el­e­gance and vi­brancy of to­day’s San Fran­cisco.

“The ver­ti­cal pro­por­tions of the grand rooms in the Lu­mina du­plex pent­house come from old world ar­chi­tec­ture,” says Fort-bres­cia. “There’s noth­ing that re­places the sense of a grand space. It’s part of the psy­chol­ogy of com­fort and el­e­gance.”

China’s 10th-largest de­vel­oper, R&F Prop­er­ties, also has an ag­gres­sive ac­qui­si­tion strat­egy for the Bay Area. Through its US en­tity, Ful­ton Street Ven­tures, it re­cently bought a high-rise site at 325 Fre­mont Street for US$28.5 mil­lion. Only a stone’s throw from the Lu­mina tow­ers, the site has ap­proval for 118 lux­ury flats over 25 floors.

Wealthy Chi­nese make up the third-largest share of wealthy for­eign home­own­ers in the United States, be­hind Cana­di­ans and Bri­tons, ac­cord­ing to a Sotheby’s In­ter­na­tional Realty re­port in Septem­ber. From April 2014 to March this year, Chi­nese buy­ers—in­clud­ing home hun­ters from Hong Kong and Tai­wan— spent US$28.6 bil­lion on US res­i­den­tial real es­tate, more than any other non-us group, ac­cord­ing to the Na­tional As­so­ci­a­tion of Real­tors in June. That’s a 30 per cent in­crease on US$22 bil­lion the pre­vi­ous year. Al­most 70 per cent of the pur­chases made by Chi­nese were all cash, com­pared to 55 per cent for other for­eign buy­ers and 25 per cent for ac­qui­si­tions by Amer­i­cans.

Within the US, Chi­nese buy­ers are strongly fo­cused on the West Coast, with 35 per cent of sales to Chi­nese buy­ers dur­ing the 12 months to March 31 this year be­ing in Cal­i­for­nia, as­so­ci­a­tion fig­ures show. Key ci­ties across the coun­try in­clude San Fran­cisco, Los An­ge­les, Seat­tle, New York and Hous­ton. San Fran­cisco also just topped Knight Frank’s lat­est Prime Global Ci­ties In­dex, which tracks lux­ury real es­tate in key global ci­ties. The city’s an­nual price growth in the first quar­ter was the high­est in the 35-city in­dex.

San Fran­cisco’s fu­ture is rid­ing a com­bi­na­tion of the tech and start-up wave, low in­ter­est rates, re­stric­tive build­ing reg­u­la­tions, lim­ited land and a plen­ti­ful sup­ply of for­eign buy­ers. Ap­ple alone em­ploys more than 20,000 peo­ple in the San Fran­cisco Bay Area. Imag­ine hous­ing de­mand if tech en­gines such as Pin­ter­est, Shyp, Zynga, Airbnb, Drop­box, Snapchat and Uber go pub­lic. The city’s ma­jor health in­sti­tu­tion is now called the Priscilla and Mark Zucker­berg San Fran­cisco Gen­eral Hospi­tal and Trauma Cen­tre af­ter the cou­ple’s US$75 mil­lion do­na­tion, and Ap­ple’s Tim Cook un­veiled Ap­ple Mu­sic at the city’s World­wide De­vel­op­ers Con­fer­ence in June.

WEALTHY CHI­NESE MAKE UP THE THIRD­LARGEST SHARE OF WEALTHY FOR­EIGN HOME­OWN­ERS IN THE UNITED STATES

Such de­mand has been driv­ing in­di­vid­ual mar­kets around Sil­i­con Val­ley too, in towns like Ather­ton, Los Al­tos and Palo Alto—the larger houses in such mar­kets are spec­tac­u­lar and in high de­mand based on their prox­im­ity to ma­jor tech em­ploy­ers and ac­cess to in­sti­tu­tions like Stan­ford.

The mul­ti­mil­lion­aire fi­nancier Robert Fried­land just sold Lock­sley Hall, a fivebed­room, seven-bath­room prop­erty in Belvedere, for US$47.5 mil­lion. The sale breaks the record for the high­est re­ported sin­gle-fam­ily home sale in the San Fran­cisco Bay Area prop­erty mar­ket by US$12 mil­lion, and the high­est re­ported sale in Belvedere by around US$22 mil­lion.

Ruth Po­rat, former CFO of Mor­gan Stan­ley and now Google, just spent US$30 mil­lion on a new three-bed­room home on Cow­per Street, Palo Alto (orig­i­nally built for a de­scen­dant of Levi Strauss), the most ex­pen­sive pur­chase ever in Palo Alto.

Ev­i­dently the builders of the Golden Gate Bridge were pre­scient when they hoisted the struc­ture’s tow­ers in 1937—stand­ing as they do to­day like two gi­ant hash­tags, ex­ag­ger­at­ing the size of the tech stam­pede: #sf­gol­drush. Bring on the lu­mi­nar­ies.

lux­ury eyrie Lu­mina’s du­plex pent­house of­fers com­pelling views over the city and San Fran­cisco Bay day and night

Home sweet Home Nat­u­ral light floods both the kitchen/fam­ily room and the master bed­room of this mid-cen­tury prop­erty at 2635 Broad­way, Pa­cific Heights, a highly de­sir­able San Fran­cisco dis­trict renowned for fa­mous res­i­dents

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