As the rich get richer, the livin' gets easier
By Carol Lloyd, Special to SF Gate
Friday, January 26, 2007
After a long run of rampant price increases, the once lofty world of condo sales has recently come down to earth. The years of double-digit gains are over and appreciation of San Francisco condos isn't even keeping up with inflation.
But to twist an old cliche: Fear of penury is the mother of invention.
Lately, developers have been innovating on the condo concept like it's a Starbucks beverage. Grande? Foam or no foam? Soy, 2 percent, caramel, peppermint, raspberry? Most of the new products -- like the fractional condominiums of the Ritz Carlton and the ultra-luxury condos planned for Rincon Hill -- capitalize on the abundant resources of the richest of the rich.
By introducing San Francisco to its first fractional condominiums, the Ritz Carlton Club and Residences (on sale now and slated to be finished in November) have discovered what one might consider an unlikely niche. Sometimes referred to as high-end time shares, fractional condos allow people to buy a percentage of the property -- say, 1/12 -- which gives them access to the property one month out of the year.
"It's really an alternative to a second home," says Robert Van Dijk, the project manager, who adds that many of their new buyers are local residents who are buying a downtown getaway in a city in which they already live or live very close to. Used as lodging for out-of-town family or guests as well an urban escape, a fractional condo offers people a relatively affordable (yet still luxurious) substitute for the $1 million-plus pied-à-terre. Instead, buyers spend more than $250,000 for 1/12 of a two-bedroom condo. Van Dijk says they are especially attractive to those who have already bought second homes only to have them sit empty most of the year. "It's about leisure living," he explains. "It's for people who want all the services and luxuries that come with the Ritz Carlton, but they don't want the burden of a second home."
But out of a sea of innovative offerings, there is one luxury condo development that isn't chasing the ultra-affluent clientele. Billing itself as the city's first "lifestyle condo," the Soma Grand (also on sale now and open in the fall) is a stylish, green-glass, 22-story tower of 246 condominiums next to the wild modernist Federal Building at Mission and Seventh streets.
"Everyone's heard of the Four Seasons and the St. Regis," explains Chip Conley, founder of Joie de Vivre Hospitality, which teamed with AGI Capital and TMG Partners on the project. "But Soma Grand is for the rest of us." With prices ranging from $500,000 for 704 square feet to over $1 million for a 1,600-plus three-bedroom, two-bath on an upper floor, this development isn't actually affordable to a lot of "us," including yours truly. But compared to other downtown projects, the Soma Grand can't be considered especially pricey, either.
According to Conley, what's unique about these mid-priced condos are their high-end amenities. "We offer residents the benefits of a boutique hotel, minus the hotel and the luxury prices," he says.
Indeed, Joie de Vivre will deliver an unusual array of services rolled into the HOA fees, including bimonthly housecleaning and "turn-down service," as well as a 24-hour concierge available to help with everything from coordinating handymen and hiring a dog-walker to arranging for someone to troubleshoot a broken computer.
"A lot of us want people to take care of us, but we don't have the time to arrange that," explains Conley. "Many people in San Francisco are more time-starved than money-starved, so the Soma Grand is designed to help people with their lives."
Conley has shown a preternatural sense of "what people want" from the perspective of design and pampering. He began his company 19 years ago after renovating the run-down Phoenix Hotel in the Tenderloin into a swank haven for hipsters and visiting artists. Since then, the company has become known for its eclectic design and careful attention to personal service, growing into the largest boutique hospitality company in California, with about 30 hotels across the state.
Conley says that because Joie de Vivre now has a staff of 2,500, with many teams of housekeepers and maintenance people in the city, the company can afford to include housekeeping and other potentially expensive services as part of the HOA fee. It's this bulk bundling, he says, that makes the concept of high-end amenities affordable.
And what exactly does he mean by "lifestyle"? Talking to Conley, it seems to be a quintessentially San Franciscan cocktail of dark-roast caffeine, creature comforts and spiritual sweating. The lobby will offer 24-hour Peets Coffee and herbal teas for residents and their guests. The building's fifth floor is dedicated to a swimming pool, a sun deck, and a fitness center, which includes a day spa, a yoga studio, a meditation garden, a fire pit and a club room. Soma Grand also boasts a public sculpture garden, a private roof garden and a "unique and sophisticated restaurant." Conley says the company plans to host monthly wine tastings, yoga classes and other "lifestyle" events.
Indeed, the coddling of the condo world seems to be a wave that has only begun to change the fabric of the inner-city living. Once leisure was associated with rural retreats -- moving to the country house, the winery, even the small historic town. Now developers are finding there's a rich vein of passion and cash for living downtown as long as it is accompanied by enough luxuries to offset the grime, crime and hassle. At the Ritz Carlton, the fractional owners receive twice-daily (!) housekeeping and an amenity called "provisioning," which involves the hotel staff unpacking your belongings and filling the fridge with your favorite food before you arrive.
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