SOLAIRE AWARDED REAL ESTATE DEAL OF THE YEAR BY SAN FRANCISCO BUSINESS JOURNAL
When city officials envisioned the Transbay district, the plan was to create an economically integrated neighborhood where luxury towers and affordable housing were built side by side.
Enter Golub & Co. and Multi-Employer Property Trust (MEPT), which won the rights to build a luxury tower with 409 condos on Transbay Block 6 and to partner with Mercy Housing on 70 affordable units.
But the development team didn’t have a partner at the city level to negotiate with. In 2012, San Francisco’s redevelopment agency was abolished. It look a year for its successor, the Office of Community Investment and Infrastructure, to be formed.
“We sat on our tail for a year, wondering what to do,” said principal Lee Golub of Golub & Co.
It was Mercy Housing’s Doug Shoemaker who came up with the final concept, Golub said. Instead of including the affordable housing in the tower, the developers bought out the affordable portion. Golub and its partners paid $24 million as a buyout, $14 million of which was used to build neighboring 280 Beale St., built by Mercy. The two buildings share a courtyard and garage.
The remaining buyout money is funding additional affordable housing across the street on Block 7, set to open in early 2018. The Block 7 project, originally planned for 80 units, now includes 120.
“We were the guinea pigs with the Office of Community Investment and Infrastructure,” Golub said. “It took us a long time to negotiate the development agreement.”
At the time, it was a pioneering approach, with two separately owned and developed communities on the same block. Solaire, the market-rate project, is a 32-story LEED Gold tower with 402 apartments and seven townhomes. Solaire is nearly 80 percent leased. Mercy’s eight-story 280 Beale comprises 70 affordable homes.
“It was one of our most cost-effective projects,” Shoemaker said. “That had a lot to do with the fact that the market-rate and affordable (developers) shared a contractor and went out for bids together.”
The developers planned to open both buildings at the same time. But construction delays, including a glass shortage, pushed back Solaire’s opening to May 2016. 280 Beale opened in 2015.
The decision to split the market-rate and affordable units into two separate buildings made the development possible, Golub said.
“Otherwise,” he said, “we might have still been sitting here without a project.”
RESIDENTIAL – Solaire and 280 Beale
Location: Solaire at 299 Fremont St. and 280 Beale St.
Size: 409 market-rate units (Solaire) and 70 affordable apartments (280 Beale)
Cost: More than $200 million
Developers: Golub & Co. and MEPT (advised by Bentall Kennedy) and Mercy Housing California
Contractors: Balfour Beatty and Cahill Construction
Architects: Solomon Cordwell Buenz, Santos Prescott and Associates