District 8C - 1635 California ($679K-$835K, 2BD)

Ahhh...the famed California Street. Those in commercial real estate will tell you the prestige and much higher $/sq. footage that the California street address brings. In fact, architects have been known to be asked by their corporate client to find creative ways in design (such as creating eavesments) just so that the client can legally claim a California Street address.

Take the Bank of America building, for example; it's really located closer to the Pine St. / Kearny St. corner of the block (big building on the SW corner), but they have managed to successfully pull off 555 California Street as their official corporate address.

While the commercial real estate hoopla for California Street is mainly in the Financial District area, the residential prestige of a California St. address at the top of Nob Hill is not too shabby either. There's currently a $3.5 million, 2 Bedroom condo available at the top of this building at 1001 California Street.

Well, what about the lure of California St. beyond the Financial District and Nob Hill? I decided to check out the long awaited NEW condos at 1635 California Street firsthand during its debut last month. This is a development sponsored by Vanguard Properties, who typically are involved in fairly decent home projects.

For starters, this area of town has a lot of hustle and bustle, probably the best way to describe it. You are 1/2 block over from Van Ness, with a lot of cross-town traffic going East/West on California. So those who view the glass "half full" will like the accessibility to Van Ness/Franklin/Gough....good for the commuter crowd who need to get to 101 quickly. Similarly, a good mix of the shops and restaurants on Van Ness. Those that view the glass "half empty" may not like the noise and heavy traffic (but hey, if you want to live in this part of town, then that's what you get).

Entering the building, you'll see that this is new construction from the ground up. These condos are not a remodel of an existing building. In fact, if you view the Google maps and select the satellite view, you'll see the empty lot that existed where 1635 California condos currently sit.

This is a 36 unit building, with an individual parking spot allotted to each tenant, so a decent size garage downstairs. My only concern is that both the entrance & exit ramp to the garage share the same lane. This system works good for small 3 unit buildings, but not a good idea for such a large building. Imagine ready to leave to work in the morning and driving your car up the garage exit to California St., only to find your neighbor trying to enter the garage. Not fun, especially if you are in a hurry.

As with most new buildings in recent years, overall construction and materials appear to be sound. Adjacent to the garage are ample individual storage rooms allotted to each condo owner. When you enter the building, there is a large open air atrium that dominates the middle section of the building. This provides a lot of air (albeit it city air) and sun to the center of the building. While this format works good for corporate offices, this attempt at zen like balance, essentially takes out at least 35-40% of usable square footage on each floor of the building.

This is not an accurate representation (as I tossed their brochure a while ago), but the picture below gives you and idea of what I'm talking about. This is a birdseye view (i.e., view looking downward) on a typical layout on each floor.

Birdseye View of Floorplan of 1635 California Street Condo Complex

Don't get me wrong, open space is not a bad thing, but it is when you try to shoehorn six 2 bedroom condo units per floor (in a space that really should house 4 condos, given the layout).

The units themselves range from the low 900 to mid 1000 square feet on the high side. Great if this was a 1 Bedroom, but a bit tight for 2 Bedrooms. The irony is that I have seen other 2 bedroom condos in the city that still seem spacious, despite only having ~1000 square feet; however, the 1635 California units fail miserably on this front. The units lack wide space in the family room, which is quite unfortunate, as this space is the main visual focal point when you first enter the room. As a result, a person entering the condo will tend to notice the cramped layout and the relative "apartment-like" atmosphere.

So how best to describe the interior? Take your pet mouse or hamster, stick it in your Addidas shoebox and ask him what he sees. If he could talk, he would probably say, "I'm in a freakin shoebox, what do you expect me to see!"

All kidding aside, the bedrooms are quite small, with no true master bedroom between the 2 sleeping rooms (or at least one that warrants such a distinction). Perhaps my biggest complaint is with the bedroom windows. In the theme of getting good light to the units, the builder put ample windows in the room; the only problem is that you have wonderful views of the hallway and your neighbor's bedroom! In fact, you can see how close your neighbor's window is in the picture below (upper left hand corner of the picture). I don't see anybody in their right mind leaving the drapes open in their bedroom, which almost makes the effort to put windows in the room quite ridiculous in the first place.

SF Bubble Research (from www.SFbubble.com): Not much sales activity in this area in the past few years, none on the block. There were some condo sales a couple blocks away on 1715 Polk in the 2004 timeframe....all 1 Bedrooms in the $453K - $610K range, with an average of $673/sq. foot. The closest sales listing on California Street that existed was at 1817 California #2E, with a sale that closed in the Oct. 2005 timeframe at $650K, for a 787 sq. foot place.

Conclusion: I think if the builders had rolled this out as a commercial space, this building might have turned out to be a decent property. The atrium seems like something you would see on your way to your chiropractor's office. In fact the internal layout of the condos, are very office-like......a receptionist located in the current kitchen area, the waiting area in the family room, and the patient room in either of the bedrooms.

It appears that the condos at 1635 California cannot shake their office space or apartment-like DNA. The nicer units (both in size and view) will be on the upper floors on the corner units, with their selling prices in the $789K to $835K range. While they are fairly priced at the current bubble-rate for new condos (~$750+/sq. feet), there are much better alternative of condos in the South Beach area (like the Towers and Beacon, or even slightly older ones like Portside).....ones with better views, layout, and even location.

Remember, we are entering a period in 2006 when a lot of homes that were purchased on ARMs are entering their interest rate adjustment phase and you might see some desperate sellers emerge from those that bought condos in 2003-2005. As these 1635 California condos are new, so not much negotiation that you can do on price.....something to keep in mind.

As for me, there is a new condo development called "The Palms" over in SOMA which I plan to check out (appointments available for registered VIPs on 1/23/06). Look for a review in the weeks to come.