Goldman Sachs Group Inc’s urban real estate investment unit and homebuilder Noteware Development bought 5.75 acres in San Francisco’s Bayview-Hunters

Goldman Sachs Group Inc’s urban real estate investment unit and homebuilder Noteware Development bought 5.75 acres in San Francisco’s Bayview-Hunters Point section for US$19 million and will build 338 condominiums there.

The property, a former Coca-Cola plant at 5800 Third St near Monster Park at Candlestick Point, will have about 291 market rate condos priced above US$500,000. The US$146 million project will also have 47 affordable units priced above US$200,000 and stores occupying 11,000 square feet, the companies said on Tuesday.

The project, situated along the new Third Street light rail line that connects the Bayview to downtown, comes amid efforts to provide mid-priced housing in one of the most expensive US real estate markets.

The median price for a single-family home in April in San Francisco was US$850,000, up 4.9 per cent from a year ago, and the median condominium price was US$782,000, up 1.2 per cent, according to DataQuick Information Systems.

‘We believe in building moderately priced, quality housing that working families can afford, and bringing much needed retail to diverse and vibrant neighbourhoods like the Bayview,’ Alicia Glen, managing director of Goldman Sachs’s Urban Investment Group, said in a statement.

The national median home price in March was US$215,300, according to the Chicago-based National Association of Realtors.

The first apartments will open next fall, Noteware spokesman Claude Everhart said. Houston-based Noteware, founded by former Maxxam Property Co real estate executive James Noteware, has completed a 66-unit condo project in Phoenix and is building a 356-unit project in Las Vegas and a 198-unit building in San Francisco, near Third Street, according to the company’s website.

The Goldman Sachs Urban Investment Group funds real estate projects in emerging or transitional urban areas. Since 2001, it has invested over US$200 million.

The Third Street site was previously owned by Lennar Corp, the largest US homebuilder by revenue, and Levin Menzies & Associates, the statement said.

Lennar received approval from the San Francisco Board of Supervisors last month to build a mixed-use complex nearby that includes a new stadium that could be home to the National Football League’s 49ers. The team is negotiating with Santa Clara, 44 miles south, to build a stadium in that city.

Citigroup Inc, the world’s biggest financial firm, is providing construction financing for the Goldman-Noteware project.

Source: The Business Times, 14 June 2007