Developer plans 1,000 units in upscale area
Three years after winning approvals to build 744 units of housing on the UCSF Laurel Heights campus, a San Francisco developer is doubling down on the exclusive neighborhood.
The Prado Group has acquired the former California Pacific Medical Center campus from Sutter Health, a 5-acre, three-block site on the edge of both Presidio Heights and Laurel Village.
The hospital was shut down in 2019 when Sutter Health opened a new medical center on Van Ness Avenue.
The property is currently approved for 273 units. The price was not disclosed but market sources put it at about $50 million, or about $180,000 per buildable unit.
Prado Group President Dan Safier said in a statement that “large quality sites like this rarely come available, especially in San Francisco’s northern neighborhoods.”
“Presidio Heights is one of the most built out, supply constrained submarkets in the city,” he said.
The land deal comes six months after another development group, TMG Partners and Grosvenor, decided not to go forward with the project after completing a lengthy neighborhood approval process.
The question now will be what changes Prado Group will make to the approved project to make it financially feasible. The combination of high construction costs, rising interest rates, and a softening housing market has stalled residential development across the city.
Planning Director Rich Hillis has said that several of the developers that looked at the CPMC campus told the city that they would have to increase density to make it work financially.
Safier said the immediate plan is to extend the current entitlements for another three years “while we explore opportunities to improve the design, construction and overall feasibility of the project.”
He said that Prado doesn’t have any specific changes to propose but that the company is looking at a variety of “design, construction, and program efficiencies.”
“Every housing project in San Francisco is grappling with economic feasibility,” he said. “The city understands this and is working hard to improve muchneeded housing production across the board.”
Meanwhile, Prado Group is also focused on obtaining building permits for the UCSF property at 3333 California St., four blocks to the east of the old CPMC hospital at 3700 California St.
Safier said Prado views the two projects as “complementary bookends” to the Laurel Village shopping district.
The deal is also one of the first sales of a development site since before the pandemic. CBRE broker Kyle Kovac, who represented Sutter Health in the sale, said there was no shortage of interest in the site.
“Opportunities to build significant density in premier San Francisco neighborhoods are rarely available,” he said. “As such, we received a very robust response from a truly global investor base.”