HRE investor receives go ahead to convert building to medical in a tight market
Embarking on any type of commercial real estate (CRE) project in San Francisco can be a difficult task fraught with risk, be it for a new ground-up development or the repurposing of an existing building to a new use.
Gaining the necessary approvals for CRE projects – a process often referred to as the “entitlement” process – is notoriously challenging in San Francisco, a city of activists.
Many proposals in the city take months or even years to complete – if they are completed at all – while land and building costs continue to rise. A company proposing a project in San Francisco must do a thorough job of underwriting and due diligence up front, and it must have the capabilities and persistence needed to see the process through.
It sure looks as if that’s what White Plains, N.Y.-based Seavest Healthcare Properties LLC has accomplished with its first-ever project in the City by the Bay: a repurposing and rebranding of an older, seven-story, 119,262 square foot office building at 939 Ellis St. into a modernized outpatient medical facility.
“I would say this is the first time we’ve really taken real entitlement risk on a project,” David Braunstein, VP of acquisitions for Seavest tells Healthcare Real Estate Insights™.
But it was a calculated risk and the company’s subsequent nine months of hard work has paid off. The San Francisco Planning Commission voted unanimously in March to approve Seavest’s application for a health services conditional use authorization for the building, clearing the way for the medical conversion.
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