News & Research Archive

Pulse Of The Market (Pulse 76 - Then and Now)

Feb 10, 2010

I got the idea for this Pulse from an article about real estate securitization that appeared in the New York Times in January. "The size, scope and complexity of the 1920s real estate market undermined its merits, causing a crash not unlike the one underpinning our current financial crisis." It got me thinking about the building explosion of new condominiums, then and now.

Back Then

At the start of the 20th century, the population of San Francisco was about 342,782. The population of the greater Bay Area was 658,111. Between 1908 and 1930, there was a dramatic building boom of new apartment buildings (many of which became condominiums) and co-ops: some 78 buildings comprising about 1200 units. The average size of these buildings was 15 units; the largest was 91 units (Cathedral Apartments at 1201 California). They were mostly on Nob Hill, Russian Hill, and Pacific and Presidio Heights. Some 42 well-known architects designed these 78 buildings, most of which were built in the latter part of the 1920s leading up to the Crash.

The catalysts for this boom were easy money, speculative fever, and San Francisco population growth. Between 1900 and 1930, San Francisco's population almost doubled from 342,782 to 634,394.

Today, 75/100 years later, these buildings are sought after addresses because of their distinctive architectural styles. They are classics.


This time around the building boom started in 2001 and ended in 2009. As noted in the November 2009 Pulse of the Market, the Seven Sisters include a total of 2051 condominiums built in the south of Market Street neighborhoods. They are distinctive because of their soaring heights and unmatched amenities.

This time the catalysts were easy money, speculative fever, and Bay Area population growth, rather than San Francisco City growth.

In the 40 years from 1930 to 1970, San Francisco population grew only 12.8%, from 634,394 to 715,674. The Bay Area, on the other hand, almost tripled from 1,578,009 in 1930 to 4,630,576 in 1970, and stands today at 7.4 million. San Francisco remains at a touch under 800,000. The major growth has occurred in the surrounding countries of Santa Clara, Marin, Contra Costa, Alameda, etc.

To fill the new batch of condominium buildings, many of the buyers are coming from the greater Bay Area, and are empty-nesters and pied a terre buyers.

A Few Comparisons

We all know that the real estate industry is cyclical and there are booms and busts. Easy money is the main driver. Beautifully designed buildings were constructed prior to the Crash. While most of them averaged 15 units in size, there were a few large buildings. Their lobbies speak of their character.

1201 California (Cathedral Apartments) - 1927 by Weeks & Day - 91 units

1101 Green (The Bellaire) - 1930 by H.C. Baumann - 77 units

666 Post (Crown Towers) - 1926 by John C. Hladik - 54 units

1201 California lobby 1101 Green lobby 666 Post lobby

Gone is the warm, classical style of the 1920s, and in its place, we now have soaring, sleek edifices.

A few examples...

301 Main/338 Speer (The Infinity) - 2008 by Arquitectonica/Heller Manus - 650 units

301 Mission (The Millennium) - 2009 by Handel Partners - 419 units

425 First (One Rincon) - 2008 by Solomon, Cordwell, Buenz - 390 units.

The Infinity Millennium One Rincon

Is it possible to look out 75/100 years and determine whether the circa 2000+ buildings will be considered classics? Hard to say, but if pressed, I would say yes. Here is why. It is going to be awhile before the financial markets heal to a point where construction financing is available and a sufficient number of high-end buyers have repaired their balance sheets. It will happen, and it will probably happen sooner than we expect because we western folk are a hearty and innovative breed.

However, a likely return to financial prudence may preclude the volume of building that we have seen in the last 10 years. Smaller, less grandiose structures may be the order of the day over the next 20 years. Lenders will take a hard look at how a developer plans to fill up a 200+ unit building.

The 2000+ crop of new buildings, exemplified by the Seven Sisters, may ultimately become classics of their time.

Note: Photos courtesy of Dan Friedman

Written by: Malcolm E.A. Kaufman


Starboard TCN is posting this article on its website and blog with Malcolm E.A. Kaufman's approval.

Malcolm E.A. Kaufman is Founder of PulseFactors™ LLC. He refers you to his website,, where you can see recent issues of Pulse of the Market© and learn more about him. He invites your comments, suggestions, and questions.

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