San Francisco high-rise apartment building NEMA loses half its value – $264MILLION – in the last five years
One of San Francisco’s largest apartment buildings has lost half its value in five years as the Bay Area grapples with occupancy issues amid a surge in crime, homelessness and the fallout from the COVID pandemic.
NEMA, the 754-unit apartment complex once valued at $543.6 million in 2018, has halved its value to $279 million over the past half decade, the San Francisco Chronicle reported.
In August, Crescent Heights, the real estate developer behind NEMA, said, βThe property’s cash flow can no longer cover monthly debt payments,β as mortgage costs to the developer exceed the building’s total value by $384 million.
βThe design inspiration for NEMA was to create a residential building that would reflect the current and future cultural changes of apartment living in San Francisco,β said the architect of NEMA Glenn Rescalvo said on the building’s website.
It is the latest building to signal the struggle in downtown San Francisco as the streets are overrun with crime and homeless encampments.
NEMA, the 754-unit apartment complex once valued at $543.6 million in 2018, has halved in the past half decade to $279 million
It’s the latest building to herald the strife in downtown San Francisco as the streets become overrun with crime and homeless encampments
NEMA β where apartments cost between $2,500 and $6,300 per month β is located two blocks from the Civic Center and UN Plaza on 10th Street.
The building is located in a previously bustling neighborhood next to Elon Musk’s X and was formerly west of ride-share company Uber and tech company Block.
Since the start of COVID-19, all three companies have reduced the number of office workers and even left their buildings vacant. According to San Francisco data, the office vacancy rate in 2022 was 27.6 percent. CBRE.
In addition to the pandemic, the San Francisco area has recently been overrun with crime, drugs and homelessness.
The occupancy rate at NEMA was 96 percent in 2018, 72 percent in 2020 and 92 percent in March 2023.
But according to a September inspection report, “the building will require further investment to maintain its ‘good’ condition,” the San Francisco Chronicle reported.
NEMA, short for ‘New Market’, opened in 2013 and offers a range of amenities such as three terraces, a games room, a private park, an 18-metre swimming pool, outdoor dining and much more.
COVID hit the Bay Area apartment market hard as estimated tens of thousands of residents left the city and even the state.
Homelessness has also played a huge role, as San Francisco spends about $29 million a year on housing, including buying and building homes.
The Department of Homelessness and Supportive Housing spends about double that to operate six 521-bed shelters.
The building is located in a previously bustling neighborhood next to Elon Musk’s X and was formerly west of ride-share company Uber and tech company Block.
NEMA β where apartments cost between $2,500 and $6,300 per month β is two blocks from the Civic Center and UN Plaza on 10th Street
Crime has also taken precedence in the Bay Area as many stores in the city and state alone have been brutally looted and riddled with crime. The city recently announced a $15.3 million allocation to combat shoplifting in the city
By 2022, an estimated 20,000 people were homeless in the city.
To help combat the homeless problem, San Francisco has agreed to continue funding their 35 RV parks at Candlestick Point for the homeless at $12,000 per month.
Reports of homeless pirates raiding houseboats in San Francisco Bay have also fueled the crime-ridden city. Homeless people and looters have plagued the area, keeping many residents from living in the city.
In the city and state alone, many stores have been brutally looted and riddled with crime, while a Walgreens in San Francisco was just robbed by a “flash mob.”
The perpetrators filled bags and a cart full of stolen merchandise, while police were able to track down and arrest six of them with burglary.
The city recently announced a $15.3 million allocation to combat shoplifting in the city.
Seven Starbucks stores in downtown San Francisco plan to close in October as the city continues to struggle. Other popular retailers like Nordstrom, Whole Foods, CB2, Anthropology and more also decided to leave town amid the raging issues
Last week, Starbucks announced it was closing seven stores in downtown San Francisco as the city continues to struggle.
Other popular retailers like Nordstrom, Whole Foods, CB2, Anthropology and more also decided to leave town amid the raging issues.
Whole Foods left town just months after opening its doors.
All these closures have had serious consequences for the success of the large apartment complex that is nearing possible bankruptcy.
According to Hood lineIn August, there were signs that the building could soon go under and that a receiver would be appointed, but Crescent Heights declined to comment on the matter.