San Francisco's tech workers are flocking to this neighborhood
San Francisco has notoriously expensive housing, but that hasn’t stopped affluent tech workers from snapping up real estate in the city’s Mission Bay neighborhood.
In more recent years, Mission Bay has become the site of at least a dozen luxury condominium buildings sporting high-end finishes and amenities that appeal to tech workers employed by Apple (AAPL), Facebook (FB), Google (GOOG, GOOGL), Lyft (LYFT), Pinterest (PINS), Square (SQ), Uber (UBER), and other Silicon Valley companies, according to data provided exclusively to Yahoo Finance from real estate firm Compass.
The 303-acre stretch of urban land is also extremely desirable because of upcoming developments, as well as its close proximity to tech companies in the city and I-280 and US-101 — the two most frequently used highways for getting to tech companies in the San Francisco Bay Area’s South Bay, including Apple, Facebook, and Google.
“A lot of tech employees prefer that their homes be in pretty close proximity to their work,” explains Compass big data realtor Deniz Kahramaner of this real estate phenomenon. “Mission Bay is a newer, up-and-coming area that hits that sweet spot for many of them, with a lot of high-end residential constructions located a walk or quick Uber or Lyft ride away from their company headquarters.”
During 2018, at least 89 tech workers purchased homes in Mission Bay, according to Kahramaner — a 134% increase in purchases by tech workers year-over-year — followed by 54 homes purchased in the South Beach neighborhood and 39 homes purchased in South of Market, or SoMa, during the same time period. To be sure, though, one luxury condo in Mission Bay finished in 2018 is responsible for 45 of the 89 units sold in the neighborhood last year.
Matt Fuller, co-founder of Jackson Fuller Real Estate, compares these luxury high-rise buildings and their comprehensive amenities to “vertically-gated communities.”
“Many of these tech workers like ‘turnkey’ homes: properties they can just immediately live in with community-oriented set of amenities where someone else takes care of the maintenance,” explains Fuller. “They can just drag their laptop to a common area and go to work.”
The most popular residential property in the neighborhood? One Mission Bay.
The 350-unit luxury condominium building, which is over 90% occupied, sold 45 units in 2018 to tech workers, according to public filings. It includes a heated outdoor pool and poolside cabanas, private dining rooms, chef’s catering kitchen, library, fitness center and sauna, courtyard lounge and firepits, as well as nearly 16,600 square-feet of retail space. While studios and one-bedroom units are among the units entirely sold out, two-bedrooms remain available, starting at $1.56 million for a 1,173-square-foot, two-bedroom, two-bathroom unit. Available three-bedrooms, meanwhile, start at just over $2 million for a 1,639-square-foot three-bedroom, two-bathroom unit.
Arden, another development in Mission Bay with 267 condos, sold 15 units in 2018, ranging from $1.32 million for a 1,230-square-foot two-bedroom to $2.85 million for a 1,844-square-foot three-bedroom unit, MaxReal realtor Jane Hopkins tells Yahoo Finance. Arden also includes a 75-foot rooftop pool, two-story gym, and recreational lounge with pool table, TVs, and sofas.
Meanwhile, The Madrone, another Mission Bay condominium development with 263 units and amenities comparable to One Mission Bay and Arden, currently lists available units ranging from $1.69 million for a 1,252-square-foot two-bedroom to nearly $3.28 million for a 1,921-square-foot three-bedroom with views of the San Francisco-Oakland Bay Bridge.
A quickly-evolving neighborhood
Since Mission Bay became the focus of a redevelopment project by San Francisco city officials in 1998, the area has transformed from a relatively sparse stretch of land dominated by shipyards, warehouses, and old canneries into a neighborhood with high-end condo buildings, shops, and institutions including the UCSF Benioff Children’s Hospital San Francisco, named for Salesforce CEO Marc Benioff and his wife Lynne, who have pledged over $389 million to UCSF overall since 2005.
This September, Mission Bay will also become the official home of the NBA’s Golden State Warriors, with the opening of the Chase Center, a privately financed, $1 billion, 580,000-square-foot arena with seating capacity for 18,000 people. According to the NBA, the arena’s first game in early October, will mark the first professional basketball game since 1971.
Realtors like Vanguard Properties’ Ronnie Escalante and Skybox Realty’s Paul Hwang expect Mission Bay real estate prices to appreciate significantly after the Chase Center opens.
“With the new Warrior Stadium's arena, a lot of clients are looking to live and invest in a few properties by the Stadium right before it opens,” explains Escalante.
Hwang puts an even more positive spin on Mission Bay’s prospects.
“With UCSF and the Golden State Warriors, all the smart people are coming to Mission Bay,” adds Hwang.
Kahramaner and his data team at Compass reviewed all the public filings of San Francisco escrow closings that occurred in 2017 and 2018. The team excluded escrow filings with identical property buyer names that may have been duplicates. They also excluded filings where the properties were purchased by Limited Liability Companies, or LLCs, that did not disclose the individual identities of the property buyers.
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