From: SF Business Times - Blanca Torres

The credit freeze that started in late 2008 will continue to ice over the pipeline of new residential projects coming online in 2010, creating a dwindling supply of new condos across the Bay Area.

Very few projects will be able to land financing to start construction, and almost no new projects will open in 2010. In San Francisco, Jackson Pacific will open its new 165-unit One Hawthorne St. in January, the only new highrise condo project opening in the entire Bay Area next year. On the apartment side, Angelo Sangiacomo is poised to open the first phase of Trinity Place, 440 units of mostly studios and one-bedrooms.

In both San Francisco and East Bay, condo prices fell steadily during 2009, which helped move units in developments such as Tishman Speyer’s Infinity, Mike Kriozere’s One Rincon Hill and TMG Partners and AGI Capital’s SoMa Grand in San Francisco, and Holliday Development’s Pacific Canary Lofts and BayRock Residential’s Eight Orchids in Oakland. The Ellington, a 134-unit highrise in Oakland’s Jack London Square, came on the market after years of delay, but at prices below the cost of construction.

The good news in residential is in the apartment sector where vacancy is down and some landlords see rent prices going up in 2010. Rents in the San Francisco and East Bay submarket fell by 6.5 percent to an average of $1,531 during the third quarter of 2009 from $1,638 during the same period in 2008. Average rent prices, however, fell by less than 1 percent from the second quarter to the third quarter of this year and occupancy is up slightly.

In San Francisco, the Strata apartments in Mission Bay filled up by August, weeks earlier than expected. Buildings like Forest City’s Uptown and Signature Properties’ Broadway Grand in Oakland continue to attract new renters to a neighborhood that was full of boarded-up properties and parking lots a few years ago.

John Protopappas, head of Madison Park Financial, wants to start construction on at least three entitled projects in Oakland and Emeryville in the new year, but financing remains a variable. He has lined up financing to buy 901 Jefferson, a foreclosed 75-unit building.

Another sector that could see activity in 2010 is transit-oriented developments. In Pleasant Hill, Avalon Bay is building 422 apartments next to a BART station that is undergoing a $400 million transformation. Other plans for the transit village include 100 condominium units, 35,000 square feet of local service retail, a civic use area, 19,400 square feet for a business conference center and 270,000 square feet of office space.

In Oakland, a massive project surrounding the MacArthur BART station gained traction from Proposition 1C funding. Site preparation will begin in 2010, and construction of a 400-space parking garage is expected to start next fall. The project is a partnership between Bridge Housing and McGrath Properties.