SanFranciscoBusinessTimesApril5,2013,Page1

MillenniumTowerinSanFranciscois a$750Msellout
BignamebuyershelpcondohighrisesmashWestCoastrecord J.K.Dineen,ReporterSanFranciscoBusinessTimes
Fiveyearsand$750millionlater,theWestCoastsmostluxuriouscondoprojectissoldout. MillenniumTower,aglassyslateblue60storyhighriseat301MissionSt.,closedthelastofits 419units,thecompanysaid.Despitesellingthroughtheworsteconomiccollapsesincethe GreatDepression,thetowergenerated$750millioninsales,a25percentreturnoncostforthe $600milliondevelopment.Theunitsaveraged$1.8million,withpenthousessellingforasmuch as$9.8million,or$1,970asquarefootfora5,000squarefootpad. Thecondotowerwasthetallestandmostexpensiveresidentialhighriseconstructedonthe WestCoast.FamousresidentsincludeTomPerkinsofKleinerPerkinsCaufield&Byers,football executiveCarmenPolicyandHallofFamefootballiconJoeMontana. Thereweresomeprettydifficult,unsettlingtimesin2009,butwestayedthecourse,said RichardBaumert,apartnerwithdeveloperMillenniumPartners.Wesawitthroughandinthe endourplanandvisionfortheprojectwerevalidated. SanFranciscoscondomarketwasstillinoverdrivein2008whenMillenniumPartnersopened itssalesofficeandbeganpresellingunits.ByApril23of2009,whenthebuildingopenedits doorsandthefirstsalesclosed,theeconomywasintatters.Whileotherdevelopersracedtocut pricesandunloadinventory,Millenniumimplementedaonetime15percentreductionthat wasretroactivetobuyersalreadyincontract.Thedevelopermadethedecisiontokeepthe pricecuts,evenasthemarketbouncedbackin2012and2013. Towardtheendtheysoldoutataveryfastpace,saidGreggLynn,aluxurybrokeratSothebys InternationalRealty.Theycouldhaveraisedpricesandeasilysoldthoseunits,buttheystuckto theoriginalpricing. DesignedbyarchitectGlennRescalvoofHandelArchitects,MillenniumTowerwasthesecond luxurydevelopmentthatMillenniumPartnersbuiltinSanFrancisco.In2001,Millennium PartnersopenedtheFourSeasonsHotelandResidences,the100,000squarefootSports Club/LA,andretailspacethatfrontsbothMarketStreetandYerbaBuenaLane.Other MillenniumPartnersdevelopmentsinSanFranciscoincludetheentertainmentcenterMetreon (inwhichMillenniumlatersolditsinterest)andtheretailalongYerbaBuenaLane.The developeriscurrentlywrappingupentitlementsforanewtowerandMexicanMuseumat706 MissionSt.

Lynn,whohasrepresentedaboutadozenMillenniumbuyers,saidMillenniumPartners executedanincrediblemarketingandsalesprocessthatresultedinthemsellingthroughvery differentmarkets. Currently,justthreeMillenniumunitsareontheresalemarketonefor$4.5million,onefor $5million,andonefor$6.2million.Allthreerepresentasignificantpremiumoverwhatthe sellerpaidforthecondos,thoughtheyalsoinvestedmoneyoninteriordecoration. Thesituationwearefacingisthateverybodywantstobuyintothatbuildingandtheyare kickingthemselvesthattheydidntwhentheyhadthechance,hesaid.Ivebeencontactedby dozensofbuyersandagentstryingtogettheirclientsintothebuildingatthe$2millionor$3 millionrangeandthereisnothing.Thereisnoinventorybelow$4million. LynnsaidtheMillenniumTowerisourbuildingofthemoment.WhileMillenniumPartnerswill buildanothertowerat706MissionSt.andTishmanSpeyerisconstructingthenextphaseofthe Infinitytowersat201FolsomSt.,neitherwillbedeliveredforafewyears.Ithinkitsgoingto lastalotlongerthanthemomentbecausetherearenoplanstobuildanotherbuildinglikeitfor manyyears,hesaid.Itsgoingtocontinuetosetawholeneweconomicstandardforluxury unitsdowntown. A3,300squarefootunitoriginallypurchasedfor$5million,soldrecentlyfor$7.8millionafter anextensiverenovation.Peoplewhosellnowareexpectingtocashoutwithmajorprofits,he said. BaumertsaidtheMillenniumTowerconceptisnotasmuchaboutthephysicalstructureasthe residentialexperience.MillenniumTowerimplementedLaVie,amonthlyeventsprogram rangingfromfilmscreeningsintheClubLevelsprivatetheatertofiresidechatswithnotables suchasresidentsMontanaandPerkinsaswellascelebritychefMichaelMinaandformerMayor WillieBrown.Residentservicesincludeaprivateconciergeandexclusiveaccesstothe20,000 squarefootClubLevel,featuringaprivatediningroom(servicedbyMichaelMinasRN74),a 5,500squarefootfitnesscenteroperatedbySportsClubLA,anda75foot,indoor, competitionlengthlappoolsetbeneathasoaringskylight. AlanMarkoftheMarkCo.saidtheMillenniumTowersamenitiesandreputationdrewpeople totheTransbaydistrictwhootherwisewouldnothaveconsideredbuyingthere.Hehasfriends whosoldhomesonBuenaVistaPark,RussianHillandPacificHeightstorelocatetowhatwas onceagrittycornernexttoahulkingbusstation. Itbroughtalotofdeeppocketed,olderpeopletoawholenewpartofSoMapeoplewho fiveyearsagomightnothavethoughtoflivinginthatpartofSouthofMarket,saidMark. Overthattime,MillenniumTowercameintoitsown.Peoplerecognizedit.Everyoneknew peoplewhohadmovedintothebuilding.Andfinallyintheendtherewasnoinventoryofthat qualityavailable. WhiletheMillenniumTowerwasconsideredapioneerwhenbuilt,todayitissmackinthe middleofadistrictthatisseeing2.7millionsquarefeetofnewofficedevelopmentaswellasa new$4billiontransitterminal.

Wealwaystalkedaboutthiswhattheneighborhoodwouldlooklikeandfeellike,said Baumert.Nowyoucanseeit.Nowitsareality.YoustandonthecornerofMissionand FremontandlooktoyourleftandseetheTransbayTerminal.TheTransbayTowerisweeks awayfrombreakingground.Acrossthestreetat350MissionistheSalesforcebuilding.Ithas reallyvalidatedourplantobuild.