Principal Real Estate Investors and Urban Pacific Investors, LLC (UPI), broke ground this week phase two of One Rincon Hill, a 52-story, 299-unit residential development in San Francisco's South of Market (SoMa) District.
The project designed to achieve LEED certification is a companion to the existing 64-story first-phase tower.
Construction began this month, with occupancy planned for summer 2014 and final completion in fall 2014. The 485,000-square foot Phase II is expected to be the largest residential project currently under construction in San Francisco.
"The iconic development will bring much needed housing to the San Francisco residential market, while at the same time, adding another high-quality real estate property to the fantastic city skyline," said Rod Vogel, managing director at Principal Real Estate Investors.
Principal Real Estate Investors, one of the largest institutional real estate managers in the United States, is developing One Rincon Hill Phase II on behalf of the Principal Green Property Fund I. UPI, the development management company for the project, is a new entity formed by Michael Kriozere, the developer of One Rincon Hill Phase I.
One Rincon Hill was always envisioned as a two-tower development, said Mike Kriozere, development principal at Urban Pacific Investors.
"We are thrilled to be breaking ground on the second half of what is still the tallest residential tower west of the Mississippi. With the continuing density of residents and commercial tenants, we are pleased to have such a well-situated property."
One Rincon Hill has become one of San Francisco's most recognizable landmarks and the tallest building on the skyline, in part due to its location atop Rincon Hill, the last buildable hill in the city. Topped with a glowing weather beacon at its crown, the 64-story Phase I tower, with 376 luxury condominium homes and 14 townhomes, was the most successful pre-sale in San Francisco's history, with 90% reserved just two weeks after the sales center opened in 2006.
The 52-story, 485,000-square-foot Phase II tower, offering 299 units, will complete the development, which will eventually feature a total of 689 private residences and be home to more than 1,000 people.
Phase II will be offered as rental apartments, with condo mapping allowing for making units for sale at a future date. The core project team for Phase II remains as it was for Phase I, including architecture by Solomon Cordwell Buenz and structural engineering by Magnusson Klemencic Associates. However, the new general contractor is Webcor. A construction loan has been provided by Pacific Life Insurance Company.
As with the $24 million in fees paid for Phase I, the developer will pay a fee to the city in-lieu of including any Below Market Rate (BMR) units. In addition to the approximately $15.1 million BMR fee for Phase II, the city also will collect an estimated $4 million Rincon Hill Infrastructure Impact Fee, a $5.1 million SOMA Stabilization Fund Fee, and a School Fee of about $1 million.