Top 5 San Francisco Submarkets for Construction Activity

Here's a breakdown of the metro's top submarkets with the largest number of units underway as of mid-April.

Multifamily deliveries in San Francisco reached a cycle peak of almost 5,300 units in 2016, and then they started to cool off, according to Yardi Matrix data. However, 2020 was supposed to surpass the completion levels of any individual year over the past decade, with more than 6,000 units projected to come online. But as the coronavirus outbreak reached the U.S., California was one of the first states to take measures meant to prevent the spread of the virus. As a result, California Governor Gavin Newsom issued a stay-at-home order and signed an executive order banning evictions for renters who have been affected by COVID-19. At the end of March, as part of eight counties in California, San Francisco announced that most construction will be halted. Development activity in San Francisco, however, is expected to resume based on California’s statewide phased approach, with new required safety protocols in place.  

While it is difficult to estimate how many of the projects underway and slated for delivery this year would eventually be completed by the year’s end, what’s clear is that more than 50 percent of companies are reporting construction delays, according to a National Multifamily Housing Council survey. This list highlights the top San Francisco submarkets with the highest number of units underway as of mid-April.

5. Market Street

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Following the completion of more than 400 units in 2018, multifamily deliveries in the Market Street submarket declined last year by almost 75 percent, as only one project, TNDC’s fully affordable 113-unit Eddy & Taylor, came online. Overall, over the past decade, completions surpassed 2,400 units, including the second-largest community in the submarkets, Emerald Fund’s 420-unit 150 Van Ness. What’s more, the submarket remains one of the largest in the metro, with an inventory of more than 11,500 units. Developers were working on four communities in mid-April, totaling 467 apartments and representing 4.0 percent of existing stock.

The largest project underway in the Market Street submarket is Shorenstein’s 303-unit 50 Jones, developed with the help of a $110 million construction loan from Wells Fargo Bank. The upcoming community is expected to include studios and one- and two-bedroom apartments, as well as a fitness center and covered parking. The property, designed to meet LEED Gold standards, is situated at 50 Jones St. Although expected to come online in the third quarter, the coronavirus outbreak could delay the completion date.

4. San Mateo

San Mateo is both the smallest submarket and the one with the smallest number of units completed over the past decade of the five submarkets on this list. Developers delivered almost 900 units between 2010 and 2019, equal to 21.7 percent of its current multifamily stock. However, as the submarket has continued to steadily expand, construction activity picked up pace over the past year and a half. In mid-April, developers were working on a 492-unit project, representing 12.0 percent of San Mateo’s existing inventory.

Essex Property Trust’s upcoming Station Park Green is expected to feature studios, one- and two-bedroom apartments ranging from 590 to 1,387 square feet. The partially affordable community, designed to meet LEED Gold standards, is likely to include such common-area amenities as a swimming pool, fitness center and clubhouse. The four-building project will offer more than 700 parking spaces, with garage parking available at an additional cost. Station Park Green is projected to come online by year’s end, but the pandemic could potentially move the completion date into the next year.

3. Redwood City

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Following six years of virtually no significant deliveries between 2006 and 2013, construction activity in Redwood City has seen a significant uptick. In total, more than 3,000 units came online until the end of the decade, representing almost two-thirds of the submarket’s existing inventory. Developers were working on three communities totaling 534 apartments in mid-April, equal to 10.7 percent of Redwood City’s multifamily stock. Two of the three projects are expected to come online next year.

Greystar is expanding its San Francisco multifamily footprint with a 350-unit community at 1409 El Camino Real. The project, developed with the help of a $138.9 million construction loan from JPMorgan Chase, is expected to include a mix of studios and one- and two-bedroom units. The development is forecasted to come online in 2021 and to offer 35 affordable units. Additionally, the company is awaiting city approvals for a 252-unit community located in the vicinity of its project underway. What’s more, the firm is planning two Menlo Park projects totaling more than 750 units.

2. China Basin

While deliveries declined in recent years, with no units completed last year, developers were incredibly busy in China Basin last decade. More than 2,700 units came online in the submarket between 2010 and 2018, with a peak in 2016, when four projects totaling 1,524 apartments reached completion. Among them was the third-largest community in China Basin, UDR’s 447-unit 399 Fremont Street. In mid-April, 1,147 units were underway in the submarket, equal to 20.1 percent of its multifamily inventory. While all five projects are projected to reach completion this year, the coronavirus pandemic could translate into delays for some or all of them.

Essex Property Trust is working on the largest of the five developments, the 537-unit 500 Folsom. Constructed with the help of a $139 million loan from the City and County of San Francisco, the project is expected to encompass studios, one-, two-bedroom units and penthouses ranging from 431 to 1,495 square feet. Designed to meet LEED Silver standards, the upcoming property is also projected to include 109 affordable units, a spa, fitness center and more than 250 parking spaces.

1. Eastern San Francisco

Image by Frank Schulenburg via Wikimedia Commons

The metro’s largest multifamily submarket, Eastern San Francisco has added more than 9,000 units over the past decade, equal to more than 60 percent of its current inventory. In 2017, 2081 units came online, including the third-largest community in the submarket, Trinity Properties’ 540-unit 33 8th Street at Trinity Place. As a result of high demand, development activity remains fast-paced in Eastern San Francisco, with 18 projects underway, totaling more than 4,000 units, or 27.1 percent of existing stock.

Chinatown Community Development Center is working on three fully affordable projects, which total 340 apartments. Meanwhile, Related Cos. is developing two communities, including the largest project underway in the submarket, the 550-unit 1500 Mission. Developed with the assistance of a $458.5 million loan from the City and County of San Francisco, the two-building community is expected to include 112 affordable units as well as 300 parking spaces. About 1.5 miles away, the firm is also constructing the 299-unit Mason on Mariposa.

Yardi Matrix covers all multifamily properties of 50+ units in size across 133 markets in the United States. This ranking reflects deliveries of properties within that sample group.