Eyewatering sums rich homeowners have lost on San Francisco condos in city's infamous 'leaning tower'

Daily Mail​

16 hours ago

Rich homeowners lost millions of dollars after buying condos in San Francisco's leaning Millennium Tower.
Residents of the 419-unit high rise were informed in 2016 that the building had started sinking, which was also causing it to tilt.
By that time, multi-millionaires had already snatched up apartments and penthouses with some spending upwards of $10 million to build out their high rise homes.
The problems were resolved in 2023, f ollowing an extensive infrastructure project worth over $100 million, but the value of the homes inside have yet to rebound due to the litany of problems.
Craig D. Ramsey purchased a penthouse inside the building for $13 million after being convinced that once the issues were fixed the price of the unit would soar.
Ramsey had bought the property from the late venture capitalist Tom Perkins, who spent an astonishing $20 million to buy and build out the penthouse in 2009.
Ramsey, who already owned a unit in the building, told The Wall Street Journal: 'I knew there was an issue. I just thought about the value I was getting.'
In January of this year, Ramsey sold the property on for $9 million. Less than w hat Perkins had paid for the raw shell in 2009.
Ramsey, a tech entrepreneur who co-founded a firm sold to Saleforce for $1.3 billion, added: 'It was insignificant. I lost a couple million dollars. So what? You move on.'
The tech entrepreneur co-founded a software company that he sold to Salesforce for $1.3 billion in 2020, and owns other homes.
Ramsey had also parted ways with his smaller unit on the 54th floor for $2.725 million, representing a loss of 37 percent from the $4.3 million he paid in 2012.
The downtown San Francisco behemoth rests on a 10-foot deep concrete foundation made of soft soil and landfill.
The developer, Mission Street Development LLC, blamed the sinking problem on construction of the nearby Transbay Transit Center by the Transbay Joint Powers Authority for destabilizing the ground below the tower.
But according to local reports, the sinking started before the infrastructure project launched.
Overall, residents of the building were saddled with $6.8 million of the roughly $20 million extra the project ended up costing over the original budget.
It had originally been projected to cost around $100 million. During construction, however, the tower experienced more sinking and leaning.
The homeowners association is now determined to shift the narrative and help boost the value of the homes.
Dr. Joel Piser, resident and president of the board of the HOA, told the outlet: 'We've gotten so much negative press.
'We were easy targets—a bunch of people who have been successful in life and then are faced with this challenge.
'Now, we have something to counter it with. We have met the project's objective to stop the building from settling, and we're recovering.'
In an analysis by the outlet of nine sales that had closed this year as of late May, they found that on average a seller lost on average 20 percent.
Last year there was 16 recorded sales inside the building, with an average loss of 20.5 percent.
One owner sold a unit on the fifth floor for $720,000 in late last year, a 52 percent from what the seller paid in 2015.
At the start of this month there were 11 active listings inside the building on Zillow, ranging from $588,000 to $4.995 million, all besides two were listed for less than what was originally paid.
The glossy, 58-story, all-glass building, located at 301 Mission Street, was completed in 2009 and is the tallest residential building in the city.
Equipped with a 75-foot indoor lap-pool, a health club and spa, in-house cinema, and a restaurant and wine bar run by celebrity chef Michael Mina, all 419 apartments were quickly filled with wealthy residents when it opened.
Penthouse suites sold for more than $10million, with the cheapest apartment selling for $1.6million.
Gregg Lynn of Sotheby's Realty, told the outlet: 'There was incredible energy and enthusiasm about it. And consumers paid very high [prices].'
Lenders started blacklisting homes, forcing prospective buyers to either pay all cash, or find alternative financing.
Lawsuits were also filed by homeowners, that have since been resolved via a 'global settlement' completed in 2020. The terms of the settlement haven't been made public.
Part of the agreement, the Journal said, was that the defendants would compensate owners for the dip in their property value. The figures were kept confidential.
Ronald O. Hamburger, the structural engineer who oversaw the repair project, told the outlet that the project in itself was unprecedented.
His team installed 18 pilings to supper the building's foundation, then moved the weight onto the new pilings.
He said: 'It was like a bumper jack jacking up your car, only they were jacking up 200 million pounds.'
In an attempt to bring lenders, insurance companies and buyers back into the fray, the HOA also commissioned a short film to document the pile project.
Piser told the outlet that the aim was send a message that the building was open for business. He said that Citizens Bank has since cleared a $5 mortgage in the building.
Local agent Bryant Kowalczyk added: 'The financing aspect has gotten a fair amount of people off the sidelines. The building kind of has nowhere to go but up.'
Girish Mirchandani moved into the building earlier this year, paying $850,000 for a unit that the seller paid $1.545 million in 2016.
He told the outlet that the news of someone paying $9 million for a penthouse gave him the confidence and lenders opening up their books to those in the building.
Mirchandani said: 'I figured if someone's spending that on the penthouse, they've done their due diligence. Then, when my bank opened up lending there, it made it kind of a no-brainer.'