With the $11.25 million sale of a penthouse that takes up half of the 56th floor of Related California’s The Avery, the East Cut neighborhood of San Francisco has seen its biggest condo trade in more than two years. It’s a good sign for a sector still lagging behind even the modest recovery seen in the city’s single-family home market last year.
“We definitely saw an uptick in activity in 2024,” said Derec Lacio, sales director at The Avery, who added that its 118 condos are 70 percent sold with several more in contract. “Over the last four to five weeks, there’s just a new optimism felt by both the customers and the agents.”
The penthouse at 488 Folsom Street first came to market as a full-floor 8,500-square-foot offering asking $41 million back in 2019, when the city’s condo market was at its peak and a world-altering pandemic that would devastate Downtown sounded like science fiction. By the time Related brought on Compass agent Butch Haze and his team in late 2023 to relaunch The Avery’s penthouse sales, the asking price had fallen to just under $12 million for the now half-floor three-bedroom, three-bath unit with 4,300 square feet and exclusive rights to build out a 57th-floor roof deck. That represents a $2,000 drop in the asking price per square foot. The $11.25 million sale works out to $2,616 per square foot.
Haze also represented the buyer, whom he would not name but whom he described as a “very successful tech person” who took a “calculated and educated risk” on the city’s rising political and economic future.
“He took that bold first move, and we’ve seen this story over and over again where we know people are watching and waiting, and the buyer that steps up really wins,” he said.
Public records list the buyers as Kenneth and Rebecca Moss. Kenneth is the CTO at Bill, which creates financial automation software for small and midsize businesses, and Rebecca is a software engineer at the same company, according to their LinkedIn pages.
Haze said the buyers plan to make the already-built-out penthouse their primary residence. Lacio said primary owners are fairly common in the building, though it also has a large subset of owners who live within 50 miles of the city and use it as a second home. The sales team is getting a lot of referrals from current owners, he said, as well as interest from tenants living in the lower-floor apartment units who have decided to commit to its condos, which start on the 33rd floor.
“We’re not seeing that absentee homeowner in this building and it’s really instilled a sense of community,” Lacio said.
After the first penthouse sale, Haze’s team has been tasked by Related with selling the other 56th floor unit as well as two more on the floor below, which are also going to be marketed as penthouses. Those three units are not officially on the market yet, and Lacio said his sales team would use the closing price of this first penthouse as a strategy to determine prices when releasing them in the months ahead.
Lacio said the approximately 4,300-square-foot size of the half-floor plan speaks to buyers today, who are typically presented with offerings either much bigger or much smaller in the city’s luxury buildings. But Haze said he may have a taker for the entire 55th floor — an Atherton buyer who had been circling the 56th floor but missed out because during the two weeks this fall that that buyer was away on vacation, the new owners swooped in with their offer.
“It’s funny how, when you lose things, especially in the world of real estate, they become irreplaceable,” Haze said.
The increase in competition in the market is a dramatic change from 2022 and 2023, which Haze described as an “absolute hell” for Bay Area’s agents, with rapidly rising interest rates, hard-to-please clients and the uncertainty of the political scene both locally and nationally casting a long shadow.
“Everybody is really just so grateful to be done with the last few years,” he said.
Highrise neighborhood
A recent $9.25 million sale at Paramount Group’s 1 Steuart Lane a few blocks from The Avery worked out to more than $3,100 per square foot. Another in the same luxury tower near the Embarcadero went for $7.1 million, or about $2,800 a square foot. Those and other luxury fourth-quarter sales “speak to the confidence that those buyers have in moving forward with their decision to purchase in this neighborhood,” which hadn’t seen a sale over $10 million since 2022, Lacio said.
In District 9, which includes the East Cut, South Beach, SoMa, Mission Bay and Dogpatch, there were 12 condo sales over $4 million in 2024, according to Compass data, which is based on MLS data and may not include all new unit sales. That’s second only to the luxury co-op/condo market in District 7 — Pacific and Presidio Heights, Cow Hollow and the Marina — which had 16 sales over that price point last year.
Resales in District 9 were up 10 percent at the end of last year, according to Polaris data, and condo inventory citywide was down about 17 percent, compared to 2023. Condo resale prices are up 4.2 percent year-over-year to a median of $1.125 million, according to Polaris.
The Avery has averaged $3.7 million per unit and Lacio said he and his sales team would be “staying in tune with what’s happening in market trends, but then, also analyzing the remaining inventory that we have” as they think about pricing in The Avery this spring.
“As we continue to sell, we’ll just monitor what’s happening,” he said.
Though Lacio hasn’t heard from buyers directly that return to office is adding to interest in the neighborhood, the continuation of that trend is “really what’s going to drive a lot of our traffic and future sales,” he said.
He has lived in the East Cut for the last seven years and said that as amenities such as grocery stores, coffee shops and restaurants have opened and more residents have moved in, there’s a growing community spirit in the East Cut, and along Folsom Street in particular. Many buyers at The Avery already live in the neighborhood or know someone who does, he added.
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The East Cut has its own Community Benefit District, where owners pay for private cleaning and security crews that remove trash and graffiti, monitor street conditions and do outreach with the homeless. The street teams removed more than 110,000 pounds of trash in the neighborhood between January and November 2024, according to the district’s November operations report. There’s even a recently hired “Hospitality Ambassador” who provides recommendations, attends community events and monitors public spaces.
“The neighborhood has really developed over the last five years, and I think it’s one of the cleanest we have in the city,” Lacio said.