News Summary
Kennedy Wilson has secured a $183 million construction loan for the Alexan Icon multifamily project in South San Francisco. This development will provide 480 residential units, including 60 affordable units, on a 4.1-acre site. The project aims to address the housing demand in the Bay Area, offering various amenities and proximity to key employment centers, while reflecting a broader push to increase housing availability amidst rising rents.
Kennedy Wilson Funds New Multifamily Development in South San Francisco
Kennedy Wilson has recently announced the acquisition of a substantial $183 million construction loan dedicated to the Alexan Icon multifamily project located in South San Francisco. This ambitious development will span across 4.1 acres at the addresses of 1587 and 1588 San Mateo Avenue and will feature a total of 480 residential units.
Project Overview and Features
The Alexan Icon development is spearheaded by the San Diego-based R&V Management and will consist of two seven-story buildings. In addition to the residential units, the site will include 560 parking spaces to accommodate residents and visitors. Among the units, there will be 60 designated as affordable housing, reflecting a growing commitment to address the prevalent housing affordability crisis in the region.
Proposed amenities for the Alexan Icon aim to enhance the living experience for residents, featuring a pool and spa for relaxation, coworking spaces for remote work options, club lounges for social gatherings, and even a stylish speakeasy for entertainment.
Strategic Location
One of the key advantages of the Alexan Icon is its prime location, situated less than two miles from the biotech hub of Oyster Point. This area is home to major employers, including Pfizer, Biogen, Genentech, and Amgen, which underscores the appeal of this development for potential residents seeking convenience and employment opportunities.
Broader Market Context
Thomas Whitesell, the head of Kennedy Wilson’s debt investment group, emphasized the robust rental market and the strong employment base in the Bay Area. This construction loan is part of a larger trend where Kennedy Wilson has funded multifamily developments, culminating in $3.5 billion in loan originations for 2024 alone, with $1.5 billion allocated in just the fourth quarter.
Challenges and Opportunities in Housing Development
The need for multifamily housing is pressing, particularly in cities like San Francisco, which aims to create 82,000 housing units by 2031. As rents soar, with the city’s average reaching $3,260 per month—nearly double the national average—there is growing concern over a significant housing shortage. In fact, only 1,200 units were completed in 2024, highlighting the challenges of meeting current demands.
The office market also reflects a complex landscape, with a 25.8% vacancy rate in San Francisco. In contrast, apartment vacancies have dropped to 4.9%, the lowest in the past decade, indicating strong demand for rental units as rents increased by 4.3% over the previous year.
Future Developments and Initiatives
In addition to the Alexan Icon project, several other residential developments are in the pipeline. A project at 88 Bluxome St. proposes two high-rise apartment towers with 1,500 homes, while a nearby project at 1101-1123 Sutter St. aims for 303 units, including 101 affordable units. However, there have been concerns regarding potential delays due to regulatory challenges.
Overall, the multifamily housing market in Greater San Francisco has experienced a notable decrease in starts, revealing ongoing obstacles in expanding affordable housing projects. The urgent need for housing continues to be a major topic as developers work to overcome the challenges of rising interest rates and construction costs.
As construction progresses on the Alexan Icon, the project stands as a beacon of potential against the backdrop of a housing crisis, mirroring the necessity for innovative solutions and collaborations to combat the pressures of urban living.
Deeper Dive: News & Info About This Topic
Additional Resources
- Connect CRE: San Francisco Multifamily Demand Drivers
- Wikipedia: Housing in San Francisco
- Multifamily Dive: San Francisco Housing News
- Google Search: San Francisco housing crisis
- SF Chronicle: Sutter Street Tower Developments
- Google Scholar: San Francisco affordable housing
- Business Wire: Modernization Project in South San Francisco
- Encyclopedia Britannica: Urban Development
