MacFarlane Partners Acquires 1844 Market Street in San Francisco; Moving Forward with $55 Million, 113-Unit Apartment Development
May 26, 2011
MacFarlane Partners – a real estate investment manager that specializes in investments that promote smart growth, urban revitalization and sustainability – announced today that it has acquired a development site at 1844 Market Street in San Francisco on which it intends to construct an eight-story multifamily residential building.
MacFarlane Partners acquired a non-performing note secured by the half-acre site and has taken title to the property, which is fully entitled for residential development. The site is located on Market Street, just west of Octavia Street, at the nexus of three submarkets of San Francisco – Hayes Valley, Lower Haight and the Castro.
The planned residential building will consist of 113 rental apartments (99 market-rate and 14 affordable units), 5,500 square feet of street-level retail, and an underground garage with 81 parking spaces. Completion of the project is planned for the summer of 2013. Total construction costs are estimated at $55 million.
The investment is the first by MacFarlane Partners on behalf of MacFarlane Urban Real Estate Fund III (“Urban Fund III”), a closed-end, commingled fund managed by the firm that is capitalized with $211 million in equity from institutional investors. MacFarlane Partners will serve as the property’s developer.
“This investment reflects our confidence in the strong market for apartment properties in the San Francisco Bay Area, which has experienced a significant increase in rents in recent months,” said Victor B. MacFarlane, managing principal and chairman of MacFarlane Partners. “The property’s location in the heart of the City is further enhanced by the recent enactment of a payroll tax abatement plan on Market Street within several blocks of the site, which also attracted Twitter to relocate its headquarters to 10th and Market.”
The one, two- and three-bedroom apartments and ground-floor retail will face onto both Market and Waller Streets and an interior courtyard. A fifth-floor terrace will offer recreation space with views of downtown.Adjacent to the San Francisco Lesbian Gay Bisexual Transgender (LGBT) Community Center, the property’s central location in the vibrant Upper Market area where several neighborhoods meet is highly desirable, with access to an abundance of restaurants, shopping, entertainment and transit options, including Muni, BART and dedicated bike lanes. In addition, freeway access to the San Francisco Peninsula and San Jose is immediately across the street from the property, making it an ideal location for residents who commute to Silicon Valley.
Urban Fund III is pursuing an investment strategy that MacFarlane Partners pioneered in the 1990s on behalf of institutional investors: acquiring, developing, redeveloping and repositioning properties in urban and high-density suburban submarkets of select metropolitan areas nationwide that promote smart growth, urban revitalization and sustainability.
About MacFarlane Partners
MacFarlane Partners is a real estate investment management firm that manages approximately $5 billion in assets on behalf of some of the world’s largest pension plans and institutions. Founded in 1987, the firm pioneered the urban investment concept among institutional real estate investment managers in the 1990s and today is a leading capital provider for properties that promote smart growth, urban revitalization and sustainability in urban and high-density suburban areas nationwide.
MacFarlane Partners is headquartered in San Francisco, with regional offices in Washington, D.C., and the greater New York metropolitan area. For additional information, please visit the firm’s website at www.macfarlanepartners.com.
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