[Pedestrian]

Luxury in No Man’s Land
Developers in competitive city markets are building in marginal neighborhoods and pitching their projects as the next big thing.
By Katy McLaughlin
Dec. 7, 2017 9:52 a.m. ET

One Oak, a 39-story condominium building proposed for San Francisco’s mid-Market Street neighborhood, plans to offer over 300 luxury condos in 2020. A 1,500-square-foot two bedroom within walking distance of the San Francisco Opera and Davies Symphony Hall will likely list for over $2.5 million.

For now, though, said developer Loring Sagan, the place “truly stinks.” The co-founder of San Francisco-based developer Build means this literally: “People defecate and urinate on our building site every day,” he said. One positive development: A nearby liquor store that sold vodka-by-the-shot recently closed, he noted.

Mr. Sagan’s goal—to help turn San Francisco’s mid-Market neighborhood, long characterized by a large homeless population, public drug consumption and dirty streets into a destination for upscale condo living—might seem quixotic. But developers in competitive urban real-estate markets in Los Angeles, Boston and New York are doing the same, building in seedy neighborhoods and industrial sites and pitching their projects as the next big thing in luxury living . . . .

Downtown developers will likely attract young people and empty nesters in addition to foreign buyers, Mr. Leipart said. Such buyers are often less sensitive to issues such as schools and playgrounds . . . .

For developers, one sign that an area will be appealing to condo buyers is when high-profile employers move in. For Mr. Sagan in San Francisco, when Twitter, Dolby and Uber set up offices in mid-Market “those were indications” that the area was ripe for condo development . . . .

When Tanya Fruehe, a 30-year-old executive assistant, moved with husband Zachary Wesley, a 32-year-old banker, from Orange County to San Francisco, mid-Market was “frightening,” she said.

Five years later, the couple rents a roughly $3,000-a-month one bedroom in Trinity Place, a rental development that will consist of 1,900 rental units when it is completed in 2020, said Walter Schmidt, executive managing director of developer Trinity Properties. Three rental buildings—a fourth is under construction—surround a 1-acre public plaza. Ms. Fruehe said the plaza, plus 24-hour security and more occupants in the area, make her feel safe . . . .

https://www.wsj.com/articles/why-the...own-1512658346