A San Francisco penthouse that made headlines when it came on the market in 2019 asking $41 million is relaunching this month at about a 50 percent discount.
The top floor at Related’s Avery condo tower will feature a new “moody” look and a marketing campaign that leans into San Francisco’s negative media coverage.
“They brought us in to do something different,” said Compass agent Omar Maissen, who represents the property with Butch Haze. “When people go left, we tend to go right.”
The Avery sits at 488 Folsom Street in the city’s East Cut neighborhood.
Related originally intended to sell the penthouse on the 56th floor as one full-floor flat. But the developer changed its plans during the pandemic and instead divided the space into two units. In south-to-east facing Unit 5601, there are three bedrooms plus a library and 5.5 baths in 4,170 square feet. The primary suite has dual walk-in closets and bathrooms. It will ask about $10 million.
At 5602, there are three bedrooms and 3.5 baths in 4,312 square feet with an asking price of just under $12 million. Its corner primary suite, including a large bathroom, is filled with windows to take advantage of the north-to-west views over the city all the way to Ocean Beach, while floor-to-ceiling windows in the great room look east over the Bay Bridge. It also comes with exclusive roof rights.
Price strategy
Maissen said Related quickly agreed to the price reduction based on comps at other high-end buildings in the area, such as 181 Fremont, the Four Seasons Residences and 1 Steuart Lane. With a “cluster” of sales around $3,200 a square foot in those properties, the Compass agents decided to undercut the competition by pricing the units at just under $2,800 per square foot for 5602 and $2,400 per square foot for 5601.
“Now I think we’re at a number where an investor, if you’re looking at land banking, you could say to yourself, ‘Well, I’ve bought into a few hundred acres in Wyoming, why don’t I get a couple of these penthouses?’” he said.
Maissen said the agents are casting a wide net and that the buyer is just as likely an investor looking to hold and rent the property for a few years while the city recovers as a company that does business in San Francisco and wants the penthouses for events and visiting executives. They could also be bought by an owner occupier.
The agents will market the units separately and as one larger unit with about 8,500 square feet as Related originally intended. They have designs of how that combined unit could look, as well as two different options for building out the roofdeck. A finished deck would take the new owner 12 to 18 months to put in but could add substantially to the value, Maissen said, especially for ultra-high-net-worth individuals who prize exclusivity above all else.
“I’ve been scouring the earth trying to find similar roof decks where you’re in the open air, but protected from the elements, 56 floors in the air in one of the major metropolitan cities in the world,” he said. “This just does not happen.”
They intended to hold a soft launch of the property during APEC to target ultra-luxury Asian buyers, who Maissen said are used to high-rise living and put off by the privacy and security concerns of being in a single-family home.
“The idea that you can just walk up to somebody’s front door in Pacific Heights is mind-boggling [to them],” he said.
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“Edgier” interiors
The high security in the neighborhood during the Asia-Pacific Economic Cooperation conference proved too onerous to really launch effectively in November, though it gave the agents time to get feedback from the high-end brokers that the look of the previous staging was “too vanilla,” he said. In response, they brought in new “moody” staging from Birch and Tailor, with “edgier” art, more comfortable furniture, a grander dining room and dark accent walls.
“Before it was a little too corporate and didn’t really fit the lifestyle of who we thought the buyer would be,” he said.
Under the assumption that the buyer is likely bi-coastal, Maissen and Haze will travel to New York next week on an “old-school-style road show” to pitch the properties at various Compass offices around the city, meet with at least two “land-banking type of funds” that “do business in several states” and speak on a panel at an Inman event.
“It’s a product that I think speaks well to people in New York,” he said. “They not only recognize the tower concept and want to live in buildings with these amenities but also Related is a big name in New York and I think people will respond well to that.”
Maissen said high-end buyers he has spoken to from New York to Miami have “preconceived notions” of the city, which is why the new marketing campaign speaks directly to those negative perceptions. The video starts off with a news report-like announcement about the city’s ills before transitioning into upbeat music and shots of what the unit, neighborhood and wider Bay Area have to offer and why the city “may be primed for a major comeback.”
The sales pitch leans heavily on confronting people’s perceptions head on, and then explaining how those same perceptions could be an advantage to a savvy investor who gets in now, Maissen explained.
“We are embracing the negativity,” he said. “The fact that it’s depressed is not a bad thing. It’s great for your bottom line. It’s going to lead to a great deal for you. Oh, and by the way, you will end up in one of the greatest cities that ever was.”