Leases for three newly built townhomes on Telegraph Hill have set a record for the San Francisco neighborhood, according to Compass leasing agent Inna Rubinchik.
At $23,000, $25,000 and $26,250 per month, the townhomes are outliers not only for their high rental rates, but also because it’s so rare to find new construction on the steep slopes of the North Beach-adjacent neighborhood, Rubinchik said.
“Telegraph Hill doesn’t have anything close to this,” she said of the three townhomes, adding that the neighborhood “is just not known for ultra luxury because the people who can afford that generally go to Pacific Heights.”
Telegraph Hill’s off-the-radar aura makes the newly signed leases all the more impressive, said Rubinchik, who markets high-end rentals under the Leasing Agent 415 brand. Other agents had told her getting more than $20,000 in monthly payments in the neighborhood would be impossible, she said.
“The mantra is, ‘Pacific Heights, Russian Hill, Marina,’” she said. “Sometimes I hear Noe [Valley]. In the 10 years I’ve been doing rentals, I’ve heard someone specifically request Telegraph Hill maybe twice.”
Lease rankings
Rubinchik acknowledged that, because leases are not posted in city records, there could be a higher lease she’s not aware of. But, to her knowledge, the most-expensive rental in the neighborhood before these was $20,000 for a standalone single-family home with nearly 6,000 square feet earlier this year. According to her research, the biggest lease ever citywide was $125,000 a month, with leases at $35,000 a month in top-tier neighborhoods like Pacific Heights signed this year.
The Telegraph leases are a sign that people still want high-end homes in the city, but aren’t willing to commit to buying them, according to the townhomes’ developer Jeremy Ricks of Inspire Build. He spent nearly 10 years working through city approvals, neighbor appeals and pandemic-era construction to get the Telegraph Hill project finished.
“People really loved what we built but everyone seemed very nervous about buying in San Francisco given the current macro climate,” he said via email. “That’s what guided us to lease the properties instead, and wait for the stigma that has recently been created around San Francisco to reverse and interest rates to come down, where buyers will feel more comfortable buying in San Francisco again.”
All three townhomes — at 115, 117 and 119 Telegraph Hill Boulevard — were listed for sale at $10 million-plus when they first came on the market in 2022. They had multimillion-dollar price reductions this year. They came on the rental market at the same time this summer. Technically they were competing against each other, but their interior layouts, finishes and views are “completely different” and were appealing to different renters, Rubinchik said.
At 115 Telegraph, there are three bedrooms, three full and two half baths in 4,000 square feet. It was rented for the highest price — $26,250 — by a couple a few weeks ago, Rubinchik said. Like other potential lessees, they saw the new-build with panoramic city and bay views from many rooms and the rooftop deck as a bargain compared to buying it.
“Paying $26,250 a month for this property is far more palatable than paying a mortgage on $8 million-plus,” said Rubinchik, adding that any lease asking more than $20,000 a month in the city must have a view of at least one, if not both, bridges.
All but two of her luxury leases for $8,000 a month and up this year were signed by locals. Many are moving out of homes that no longer suit them, but that they don’t want to list in the current market, she said, so they are renting them out as well.
119 Telegraph has three bedrooms and five bathrooms in 4,000 square feet and rented for $25,000 just a few weeks before 115. Those renters found the property on Rubinchik’s Instagram account before seeing the listing on Zillow, she said.
The middle unit, 117, was the last to rent and at the lowest rate, $23,000. But it found a taker this week. It has four bedrooms, four full and three half bathrooms in 4,200 square feet.
Even with these three prominent end-of-year signings, Rubinchik said she has a few properties that she’s not going to list until the new year when there will be more potential renters looking. Typically, January is a hot month for high-end moves, she said, though she jokes that the current “extremely volatile” market “depends on planetary alignment.”
“There is no rhyme or reason as to why it would be dead for three weeks and then exploding hot for three weeks and then dead again,” she said. “It’s like nothing I’ve seen in the past.”
The same could be said of the sales market, where luxury deals seemed to finally pick up in late fall and then dropped off again for the holidays. Even though all three of the Telegraph Hill homes are now rented for a year, they remain available for sale as well. Ricks said he had no concerns that the renters would make it more difficult to find buyers for the properties.
“We will make sure it looks brand new when the tenant vacates,” he said.
He will “definitely not” make any further price cuts on the properties and in fact expects to “command a much higher price in a few years once everything settles down from a macro level.”
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