It is a very San Francisco problem to have a 12-story, 109-unit residential building just completely vacant for nearly three years because its owner got popped in the Mohammed Nuru scandal. But there may be new life for the empty building known as The Oak.
For years, the 1554 Market Street condo tower called The Oak has had a sign on it declaring “Now Selling.” Reader, it was not selling. As seen below, the 12-story, 109-unit residential building, also listed by the address 55 Oak Street, has been vacant since it was completed in 2021, attracting squatters and graffiti, but no residents.
13 months after its completion The Oak, the 109 unit condo building at 1554 Market St., seems to be 100% vacant, its ground floor boarded up and graffitied. Rumor has it that the developer, Z&L Properties, is in contract to sell it to a new buyer who will rent the units pic.twitter.com/zrLxVvMqZJ— J.K. Dineen (@SFjkdineen) June 30, 2022
That’s because the building was owned by a Chinese real estate firm called Z&L Properties, whose co-founder Zhang Li was arrested for bribing Mohammed Nuru in that whole scandal. This is the same Z&L Properties that owned the 555 Fulton building whose Trader Joe’s has been held up forever, and the scandal has forced them to dump most of their Bay Area properties.
But many are finding buyers, and that appears to have happened at The Oak. The SF Business Times reported Friday that a new developer has submitted plans to make The Oak apartment units instead of condos, and to fill those 109 apartments ASAP. While that developer, Steve Hong, does not yet own the building on paper, his Oak SF LLC has bought the $80 million construction loan tied to the project, and he intends to take ownership and convert to apartments instead of condos.
“The San Francisco rental housing market is dynamic and presents many opportunities,” Hong told the Chronicle. “We believe in the resilience of the market and are optimistic about its long-term growth. Factors such as job growth in technology and AI contribute to our positive outlook.”
The SF Planning Department has a somewhat more jaded view.
“It’s been incredibly frustrating to have more than 100 homes ready for occupancy but which don’t have human beings in them on account of the fact that the ownership couldn’t get their act together,” Planning Department chief of staff Dan Sider also told the Chron. “We have a beautiful structure ready for occupancy — it’s time to get something done there.”
The Chronicle also spoke with one jilted family who won the below market-rate lottery to get a condo there, only to have the rug pulled out by Z&L Properties abandoning the place. And yes, that’s a tragedy for that family. But it is a larger win that we may finally see tenants move into that entirely empty building.
“It’s beautiful brand new construction that has already become blight,” Hayes Valley Neighborhood Association president Jen Laska said to the Chronicle. “We need to see that space activated.”
The conversion from condos to apartments may be a sign of the economic times, as the very nearby and similarly named proposed building One Oak, at Oak and Van Ness streets, also changed its proposal from condos to apartments last year. Though that property went into foreclosure in April, and a mixed-use development across the street halted construction over the summer, leading to further uncertainty for both projects.
Image: Google Street View