These SF condos are selling much better than all the others. this is the reason.

Sumitha Jacob had been living in Fremont for 20 years when the pandemic hit and she decided she wanted a change. While droves of people were leaving San Francisco, I thought it was the perfect time to buy a place in the city. She searched for about a year, mostly looking at downtown apartment buildings, but she couldn’t find anything that seemed suitable. Then I learned about the Bristol Hotel.

The new housing development on Yerba Buena Island wasn’t complete yet, but even before her tough tour began, she was hooked. “I parked my car, got out, and was immediately amazed by the stunning views around me,” she said. “The water views, the Golden Gate, Alcatraz, the ships and the sailboats. I thought what? Is there a place where you can see all of that?”

The views are one of the reasons the property currently outshines other luxury buildings in San Francisco. The Bristol has outperformed facility-heavy buildings in unit sales, especially those located in the city centre, by more than twice in the past 16 months. But it’s not just the stunning views that attract buyers across the bay, the building also attracts buyers thanks to its low interest rates, separation from downtown, and island neighborliness.

The Bristol Hotel is just the beginning of the massive 8,000-unit Treasure Island/Yerba Buena Island development, where residential units on Yerba Buena Island have been completed for the first time. The small island attached to the man-made Treasure Island and accessed by the Bay Bridge will contain more than 250 homes spanning apartment blocks, bungalows and townhomes, with access to a private clubhouse, pool, 72 acres of parkland and 5 miles. Of walking trails.

Apartment prices at the Bristol range from $599,000 for a 612-square-foot studio to nearly $3 million for a 2,200-square-foot, three-bedroom studio. The project began selling units in March 2021 and has sold a total of 46 of the 124 residential units – just 37% of what is available.

But this is a success amid a tough real estate market, especially for luxury buildings loaded with amenities. September 2023 apartment sales in San Francisco were down 19% year-over-year compared to 2022, according to California Association of Realtors data. In February 2023, San Francisco’s apartment market reached its lowest point since the 2009 recession, a Compass report shows.

Average apartment prices downtown are the lowest since 2014, according to Compass data.

Crescent, a luxury building in Nob Hill that also began selling its units in early 2021, sold just 14 units. It’s far from a perfect comparison — the much smaller building houses 44 residences, “many with outdoor rooms” — but it also offers stunning views and isn’t located in downtown San Francisco. The Bristol outperforms the building by 229%.

One Steuart Lane, a 20-story building that also boasts sweeping bay views from its location off the Embarcadero, is more than 50% vacant, with 43 of the 120 total units sold since sales began in February 2020, according to Compass data. A pop-up on its website is currently advertising “price reductions” ranging from $300,000 to over $1 million on select homes.

“Almost everyone is offering something, whether they’re advertising it or not,” said Paul Zeiger, CEO of Polaris Pacific Real Estate Sales and Marketing, which represents several high-end San Francisco apartment buildings, including One Stewart Lane. Al Hilal and Four Seasons Residences. Undisclosed incentives may include the developer covering the buyer’s HOA dues costs for two years or reimbursing them for closing costs.

Since One Steuart Lane began offering discounted units last month, the building has doubled the number of people coming to view, Zeiger said.

When it comes to buying a home, the ultimate deciding factor is whether the buyer can afford it. With interest rates rising last month to a 23-year high of 8% and purchasing power declining, many buyers have opted out of the market. But the Bristol Hotel is offering something that could put them back in the market – a 5.5% interest rate.

The project’s developer, Wilson Meaney, offers what’s called a “prime buyout,” where the company works with a bank to contribute cash upfront to receive a lower interest rate for a certain period of years. This helps buyers make their initial monthly payments, giving them some relief until rates come down and they can refinance. Chrisyn Heathwood, senior managing director at Compass, said she did not know of any other development offering such a deal, but she expected that to change. “I think we’ll see more and more of it to encourage sales,” she said.

Even with an enviable interest rate, the Bristol Hotel’s technically disadvantageous location may also help boost its sales. Heathwood said downtown has lost its appeal since the pandemic for some, and they see Yerba Buena as a safer alternative. “Perceived security is still a real thing,” she said.

Its location is well-suited for people called from remote work to their offices in San Francisco, since commuting is easy on the short ferry, she said. It also attracts attention because of its novelty, Heathwood added. “It’s a brand new neighborhood,” she said. “There is no other development like this. It is very interesting.”

The rebranding of Yerba Buena is a big step in building more housing in San Francisco, but the development marks a controversial new chapter for the island. City-owned housing, intended largely for low-income residents, had remained on the island for 16 years (in addition to some previously abandoned seaside housing), but these residents were evicted and offered the option of moving to homes on neighboring Treasure Island. These homes will also be demolished soon and many hope to return to Yerba Buena Island but feel that high-end units are now out of their price range.

Habitat on Treasure Island has also been called into question, as radiological assessments found radioactive waste remaining in residential parts of the island from when it was a naval base.

Heathwood said this development is one of the most unique opportunities available today. During an inspection of Jacob’s home, The Bristol stood out because it allowed her to feel connected to the city without being in the heart of it. She said the access to nature was very appealing, and she also found other features she was looking for in the units, such as high ceilings and lots of natural light. She said some friends were concerned about her choice to live on the island, warning her that she might feel isolated and far from basic services. But now that she’s a resident, she feels the opposite: “I have a community here,” she says. “It feels like we’re family here.”

Lynn Bell, another Bristol resident who moved to the island a little more than a year ago, decided to check out the building because she had lived in San Francisco for 35 years and wanted more space. Every time she crossed the Bay Bridge to or from her job in the East Bay, her eyes would drift toward the development taking shape on the island that could be seen from the highway.

“It’s very close to the city, but it gives me this sense of calm that has disappeared,” said Bell, 63, who later became sales manager for the project.

She added that there is a common thread among residents of all ages about “connection.” The neighbors are friendly with each other and there are plenty of get-togethers, whether it’s to celebrate a birthday or attend one of the community fitness classes. She believes it will only get better when the island club is completed (estimated in 2024).

It feels like “living on an island” in an urban environment. “It’s like you went on a little vacation,” Bill said. “…There’s this extra level of something here.”