By Will Soutter
Essex Property Trust, a fully integrated REIT, has bought two neighboring land parcels in downtown San Francisco and plans to develop 2 nine-story apartment communities. The two communities will comprise 463 apartment homes and roughly 9,300 sq. ft. of retail space. They will come up near Moscone Center in San Francisco’s SOMA district.
Essex Property Trust has formed a new co-investment partnership with an investor to develop the two apartment communities. The company will hold a 55% stake in the venture and will gain development, property and asset management fees and may also gain a carried interest.
The two communities will have various amenities such as an urban park, clubhouse with chef's kitchen, fitness center, rooftop decks, movie theater and spa. The site is situated near entertainment, shopping and multiple junctions of public transportation. The total development cost of the two communities will reach roughly $250 million. The company is expecting to open the properties in spring 2014.
Michael J. Schall of Essex Property Trust stated that the company is very happy to announce the purchase of land and the start of another in-fill urban community in one of the San Francisco sub-markets. He also said that San Francisco has led major US metropolitan regions in rent growth.
The company currently holds ownership interests in 158 multifamily residential properties and an additional 8 properties are under development.