Taxpayers to Give Penthouse Residents 225% return on Condo, To Be Demolished for Transbay Transit Center
It’s not so bad out there in this real estate market. Right here in San Francisco, there’s someone making a $65,000 profit on a condo unit they bought for $735,000 in 2005. That’s pretty great — but to flip a $1.2 million (in 2002 dollars) unit for $2.8 million in 2010? Sounds like the greatest coup in modern real estate, but it, too, is being done as we speak.
But even this is cause for some suffering for the Steel Arc condominium building‘s residents at 85 Natoma Street — because it could have been even better.
The Steel Arc building is a catch: it’s full of light, open space, modern furnishings and other amenities folks work all their lives (in real estate or finance, probably) to afford. But it’s also slated to be consumed by the government. 85 Natoma and a handful of other properties nearby in South of Market are right in the way of the future Transbay Transit Center. Through the Transbay Joint Powers Authority, the building will be seized and demolished, but not before it’s purchased by taxpayers for $12.5 million.
Residents haven’t been there very long — Abbas A. Razaghi has owned Unit 3 since November 2005, when he paid $735,000 for one of the smaller units in the building, according to property records. Wendy Roess-DeCenzo, who also has an address in Atherton and flips condos in Manhattan, bought Unit 9 — the penthouse, baby — in 2002 for $1.2 million, according to records.
High-speed rail will someday run through what was their living rooms. This much is certain — the city was prepared to begin eminent domain proceedings before property owners agreed to sell, according to attorney Jeff Knowles, who is representing most of the homeowners.
It’s unclear how much a court would have awarded the homeowners in an eminent domain decision, but the homeowners will profit heavily nonetheless. The Transbay Joint Powers Authority offered Razaghi $780,000 for his $735,000 unit, according to Adam Alberti, a spokesman for the Transbay Joint Powers Authority. But Ross-DeCenzo hit the jackpot: the powers that be are offering her $2.85 million for a property she bought for $1.2 million in 2002, according to Alberti.
And they could earn even more than that for their properties — the property owners will make counter-offers soon, according to Knowles.
Not everyone profited heavily in the real estate crash thanks to high-speed rail. Take nearby 568 Howard Street. There, owners were offered $7.4 million for their property in 2007. The most recent offer is $6.2 million, according to Alberti. That’s money gone forever, but it’s still a nice take for the property owners — they paid $4.1 million for their commercial property in the mid 1990s, according to records.
Demolition is still a ways away — up to a year away, if penthouse owner Ross-DeCenzo has her way. She doesn’t live there — she’s renting out the penthouse. And for a bargain rate!
The most recent lessee paid $16,000 a month to live there, but she hopes to find a new tenant for $7,500 a month. “We suspect the new tenant should have at least six months or more,” said a representative for the Martin Building Company, which built the Steel Arc.
Get on that.