District 9F - 773 Tehama #1 ($625K, 1BD/1BA)

Take a stroll today in the South of Market Area (SOMA) "south" of the 80 freeway and you will find an area that has gone through a drastic revival. Since the late 90s, the area, which was once full of decaying warehouses and industrial buildings, has been transformed into a vibrant mix of modern lofts, restored historical buildings, and trendy restaurants (e.g., Bacar).

However, go "north" of the 80 freeway in the SOMA area, and you will find a neighborhood that is........ how should we say......... a bit more rough on the edges. It's fair to say, the northern part of SOMA (between 5th-11th Ave/Harrison-Mission) is a bit more dirtier, rowdier, and edgier. A good environment, perhaps, to catch a drink at the Wish bar or to party it up at 1015 Folsom, but what about to live in?

With this question in mind, we decided to make the trek one sunny weekend to check out 773 Tehama #1. This is a new 1 Bedroom condo, built in 2005 and located in a quiet sidestreet between the hustle & bustle of 8th and 9th Avenues. Let's be honest, the exterior isn't pretty. For those that have visited the UC Berkeley campus, it looks like a mini-Evans Hall, with the only difference being the addition of a very earth-tone hued paint job.

But perhaps we should look past the exterior, and examine the inner qualities of this condo. There are 3 units total in the building, with 2BD condos located on the 2nd & 3rd floors (the 1 BD unit is located on the bottom floor just above the garage). The garage is spacious, with the ability to fit cars for all 3 units, as well as having extra storage space. The garage door is quite interesting; it has a grated wire mesh that is fairly opaque when viewed from the outside, but is see-thru when looking outward from inside the garage (thus letting ample light and fresh air into the garage).

The unit is listed at 845 sq. feet and is optimally laid to take advantage of every square foot. The kitchen is modern, with quality finish on the cabinets and countertops. The kitchen adjoins a decent sized family room (with fireplace). Additionally, this unit comes with a functional den, big enough to use as a mini office workspace and/or storage area (den is located in the picture below.....left side of the picture, where the plant is located).

The bedroom is spacious and although it faces north, the large windows provide ample light to the room. W/D hookups are available inside the unit as well. The best feature of the apartment is the large private patio located in the back (adjoining the family room). The patio is nicely done, and is large enough to hold weekend parties or just to relax.

If the patio isn't good enough, then there is a common area on the rooftop (shared by all 3 units), with spectacular views of the city, like the one shown below.

SF Bubble Research (from www.SFbubble.com): This street has been slowly redeveloped over the years, with many of the old rundown warehouses being converted to residential properties. Here are some comps data:

• 737 Tehama (Feb. 06): $800K, 997 sq. ft --> $802/sq. ft
• 761 Tehama (Jul. 05): $530K, 721 sq. ft. --> $735/sq. ft
• 761 Tehama (Aug. 04): $505K, 838 sq. ft. --> $602/sq. ft
• 761 Tehama (Jun. 04): $600K, 1137 sq. ft. --> $527/sq. ft
• 737 Tehama (Apr. 04): $397K, 997 sq. ft. --> $398/sq. ft
• 761 Tehama (Feb. 04): $415K, 721 sq. ft. --> $575/sq. ft

Conclusion: As you can see, this little neck of the woods is a bit of a microcosm for the massive run-up in the San Francisco housing market. The upward momentum in the housing market during 2004 to the first half of 2005, has volleyed average $/sq. ft. rates to levels that are on par with that of the South Beach district (which is arguably a more desirable location).

So what does this mean for 773 Tehama? Well first of all, we do like the features of the property. The builders realized that in order to sell a home in this area of SOMA, it needs to have full amenities, as buyers will want something in return for the trade-off in location. To their credit, 773 Tehama delivers in these areas; it has parking, W/D, patio space, views, etc).

The million dollar question is whether this area of SOMA will be revitalized in the years to come, similar to how southern SOMA has changed over the past few years. There are some signs that this is happening (albeit slowly). There is another multi-unit condo development being built on the same block of 773 Tehama, so it's safe to say that the remainder slum buildings on the street will be fixed up and converted to better facilities.

The other two 2BD units in 773 Tehama appear to have been sold, with the sole 1 BD being the remaining unit (and on the market since early Dec. 05). The 1BD unit is currently priced at $740/sq. ft. For those willing to take a gamble, this is the time to use your bargaining powers. Be firm and don't pay more than $700/sq. ft. and you might find yourself walking away with a diamond in the rough down the road.