How many opportunities does the typical multifamily developer get to build out 154 luxury apartments inside of a national park in the middle of one of the strongest rental markets in the country? “Basically one,” says ForestCity Residential West president Kevin Ratner of Presidio Landmark, the company’s adaptive reuse project in San Francisco’s Presidio National Historic Landmark District. Cleveland-based ForestCity has transformed the abandoned U.S. Public Health Service Hospital into some of the city’s most exclusive apartments—and is already fetching market-clearing rents.
“I have seen a lot of residential properties, and I love all of the ones in our portfolio. But this one is pretty special,” Ratner says.
Credit that to location. Originally built in 1875 as the U.S. Marine Hospital, the structure was sited on windswept sand dunes west of downtown San Francisco to discourage recuperating sailors from indulging in the temptations of the city’s drinking, gambling, and prostitution dens. Today, Presidio Landmark sits almost in the center of city limits but still boasts quiet reflection as part of the 1,480-acre Presidio San Francisco National Park, offering residents hiking and biking trails from their front doors as well as quick access to the Golden Gate Bridge, the Golden Gate Recreation Area, and metro service to the city’s financial center.
“One of the things we felt was really important, and how we have consequently tried to position the project, was the idea that—for people who are into the outdoors and athletics—living here gives you access to all the things you can do,” Ratner explains. “You can walk to Baker Beach to windsurf or kite board. There are hiking trails because the park is literally your backyard. It is very connected to what is out here and what is happening in this area of the city.”
Space Savers
Since the Presidio does not allow any new net-square-footage development, managing available space was, in fact, a defining challenge in the transformation of the hospital into residential apartment units. For example, when building out the hospital basement into a parking garage, ForestCity sacrificed valuable space for a bicycle storage and repair shop room featuring resident bike lockers and racks and benches outfitted with the latest repair tools.
What’s more, original stick construction was replaced when the building was rebuilt from the U.S. Marine Hospital into the U.S. Public Health Service Hospital in 1932, and two wings added in the 1950s subscribed more to Brutalism than mid-century aesthetics. By 1981, however, the architecture of the building became irrelevant when the hospital was shuttered due to Reagan-era budget cuts. Abandoned until 1997, the site suffered dilapidation, vagrancy, and all of the wonderful things that accompany a squatter’s mentality.
“Even during our walk-through in preparation to bid on the RFQ in 2003, there was graffiti everywhere and needles on the floor,” Ratner recalls.
Learning Curve
1. Know the Site. Development policies in Presidio San Francisco National Park prohibit construction of new net square footage. Demolition of eyesore building wings allowed for the addition of three stories on the rear of the building and the construction of adjacent ultra-luxury, ultra-green townhomes.
2. Design Creative Spaces. Enlisting the help of longtime design partner TCA Architects, ForestCity made the best of an interior envelope originally designed for health care and military personnel rehabilitation, twisting individual rooms into 40 different urban-chic floor plans.
3. Patience Is a Virtue. Adaptive reuse that leverages historic tax credits is never an easy process. Throw in oversight by the National Park Service, the Presidio Trust, and an environmentally and sprawl-conscious neighborhood and resident base, and development and construction decisions can become myopic. Experience and an embrace of stakeholder concerns paved the way for ForestCity’s seven-year redevelopment time line.
— ForestCity notes three factors in Presidio Landmark’s success.
Negotiations with the Inner Richmond neighborhood ultimately resulted in demolition of the two Ike-era wings, which challenged ForestCity’s underwriting with a significant reduction in unit count but provided the opportunity to develop new units (including seven three-story, LEED Platinum–certified townhomes) in accordance with the Presidio’s policy on net-square-footage gain. In the main building, old hospital rooms and labs were reconfigured into junior one-, one-, and two-bedroom apartments. The resulting idiosyncratic floor plans—40 different ones across the property—have descriptive names like “the banjo” and “the tree house” that reflect design and location in the building.
“The unit designs we were able to accomplish are great,” says Ratner, who adds that Los Angeles/Irvine, Calif.–based TCA Architects were an invaluable partner in maximizing both unit count and design aesthetics. “In historic properties, you are stuck with your building envelope and typically cannot design the most efficient units. Some are big; some are small. If this were a new building, there would probably be only four plans, but the results are great, and the finishes are extremely well chosen.”
Complementing the high-end appliances are historical windows restored on-site during the redevelopment and a near endless list of amenities, including a fitness center, the aforementioned bike shop, a wine cellar and chef’s kitchen, a yoga and Pilates studio, and a massage room with masseuses regularly on staff to sooth the aching muscles of the Presidio Landmark’s active, outdoorsy residents, while private resident courtyards with fire pits and hot tubs take full advantage of San Francisco’s chilly, misty evenings.
Into the Fold
Picky Bay Area renters have embraced the project, rushing the property as units are slowly released by ForestCity. With no comparable mid-rise luxury in the immediate submarket, the firm is taking its time to stabilize the property, beginning with middle-floor units and working its way to the lower-end ground-floor apartments and super high-end penthouses. After a grand opening in the third quarter of 2010, the company released floors three and four, powering the property to a 20 percent occupancy with two-thirds of the community yet to be opened for lease-up. Rents currently range between $1,800 and $3,500 for apartments and an incredible $7,800 for the adjacent townhouse units.
The redevelopment also restores the building to its ’30s-era grandeur. ForestCity replaced some 20,000 bricks of six different colors, and limestone fascia used on the exterior wasn’t simply matched: It was sourced from the same Indiana quarry that provided the original stone.
“When you go to do historic tax credits, you always have to figure out the individual importance of every decision,” Ratner says. “It’s a jigsaw puzzle, but that’s what gets you into development like this. Creativity expands when you give it boundaries, and when you go from a 90 percent solution to a 96 percent solution, it begins to show up in the rents, and you have to think the final results are spectacular.”