In Omaha, Nebraska, $160,000 snags you a 3-bedroom home, but in San Francisco, it simply gets you a storage locker.
Such was the case on May 20 when residents at the Lumina, a luxury condominium development in San Francisco’s trendy South of Market neighborhood, participated in an online bidding war over storage units up for auction. Perched two blocks from the Embarcadero waterfront in downtown San Francisco, the Lumina sports 655 condo units and amenities that include a swimming pool, gym with climbing wall, pet grooming stations, private movie theater, two-story club lounge, and over 100 storage lockers.
Fifty-three storage units at the Lumina were auctioned off on May 20, ranging from 9 square feet to 90 square feet. The 9-square-foot lockers sold for between $4,300 and $5,100 each. However, the winning bid for the 90-square-foot locker fetched a whopping $160,000, or $1,777 per-square-foot. Put in context, that’s more expensive than the price per-square-foot of a $2.3 million 2 bedroom, 2 bath condo currently listed for sale in the development.
But stratospheric pricing is par for the course in San Francisco, where luxury building add-ons can be almost as expensive as the condos or apartments themselves. And while San Francisco real estate market is particularly notorious, it’s not the only city where add-ons fetch seemingly outrageous prices. Case in point: a 36-square-foot storage unit in New York City sold for $75,000 in 2014.
“It sounds like a lot money, but that’s the economics that go through people’s minds,” explains Paul Hwang, principal at the San Francisco-based Skybox Realty.
“You have also have to remember that the guy spending $160,000 probably isn’t your average person. It is a lot money, but it’s not like he’s throwing his money away,” added Hwang, who also owns a unit at the Lumina. “He’d prefer to have his stuff in the building than at a storage locker a block away. He wants his golf clubs, his Christmas tree, or bike downstairs.”
Doug Bend, managing real estate broker for BLG Properties, lives in a one-bedroom unit in the Lumina with his family. He and his wife failed to secure a 47-square-foot storage unit with their $25,000 bid during the auction.
“We signed up for the storage locker auction because we just had a baby girl and could really use the space,” Bend explained. “Fortunately for the developer, but unfortunately for us, it has been the perfect high bidding storm of hundreds of owners bidding on a limited supply of lockers.”
With some lockers selling for as much as they are, Bend is looking into other options such as renting an offsite storage locker or storing items with family rather than spend what he sees as an “unfair amount” for a locker at the Lumina.
The irony that at least some storage lockers are more expensive per square foot than actual condos wasn’t lost on Lumina residents.
“Wow,” one resident remarked in the residents’ private Facebook group. “At these rates, I’m down to crowdfund $1.5 million to buy another unit and all the partners can store their crap in there. I’ll take that investment over dark, cold storage units any day.”
Other residents, however, created online bidding screen names seemingly aimed at tugging at the heartstrings, such as “ForDisabledSisterPleaseDontOutbid” or “JustHadBabyNeedSpacePleaseDontOutbidUs.” After 24 hours of bidding, auction organizers blurred out screen names.
A second wave of about 50 storage units goes up for auction on June 3. Bend hopes he’ll be luckier this time.
“At the end of the day I am blessed to live in such a great building in an amazing city, but I am hoping we have better luck this Saturday or we may have to make room for baby’s gear by clearing out Daddy’s gear,” Bend quipped.
Organizers for the Lumina storage unit auction had not responded to Yahoo Finance’s request for comment as of publication.
Note: An earlier version of this story misstated the size of the storage unit sold in New York City. It has been corrected for accuracy.
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