Millennium Tower Prices Sink Below 2009 Levels

Surprise, surprise. People are actually buying in San Francisco’s infamous leaning Millennium Tower. And those fearless denizens are scooping up some screaming deals not seen in more than a decade. According to data reported by SFAR MLS, every sale in the spectacularly stigmatized highrise so far this year fell short of its previous purchase price and traded for less than $880 per square foot. For context, the year-to-date average condo sales price per square foot in the neighborhood is $1,177.

It’s been a full seven years since the building’s developer, Millennium Partners, notified its 400+ residents that the 60-story structure built on landfill was “sinking and tilting.” From that June 2015 revelation until present day, the problem as only become more severe. A $100 million Perimeter Pile Upgrade designed to halt sinking and reverse the tilt has caused an additional 2 inches of settlement and ten inches of lean since the project commenced last year. In February 2022, San Francisco Chronicle reported the tower has, in total, sunk 18 inches and is leaning approximately two feet to the northwest. Just how much more the Millennium Tower will sink and whether the building will level out over time is unclear.

Average price per square foot for condominiums sold in San Francisco citywide and in the Yerba Buena neighborhood where the Millennium Tower is located.

Needless to say, the days of the luxury condominium development being lauded as one of the Top 10 Residential Buildings in the World are long gone. So, too, is the buying frenzy that saw $100 million of sales during the first five weeks of its 2009 debut. A year-by-year look at listing activity and sales data shows just how tough it has become for sellers in the Millennium Tower to strike a deal — let alone realize a gain on their investment.

2014

› 31 new listings came on the market

› 4 of those listings eventually Cancelled or Expired (13%)

› 0 of 27 Sold during listing period at/under previous purchase price

2015

› 34 new listings came on the market

› 17 of those listings eventually Cancelled or Expired (50%)

› 0 of 17 Sold during listing period at/under previous purchase price

2016

› 33 new listings came on the market

› 23 of those listings eventually Cancelled or Expired (70%)

› 0 of 10 Sold during listing period at/under previous purchase price

2017

› 14 new listings came on the market

› 8 of those listings eventually Cancelled or Expired (57%)

› 4 of 6 Sold during listing period at/under previous purchase price

2018

› 25 new listings came on the market

› 17 of those listings eventually Cancelled or Expired (65%)

› 3 of 8 Sold during listing period at/under previous purchase price

2019

› 12 new listings came on the market

› 9 of those listings eventually Cancelled or Expired (75%)

› 1 of 3 Sold during listing period at/under previous purchase price

2020

› 33 new listings came on the market

› 18 of those listings eventually Cancelled or Expired (55%)

› 7 of 14 Sold during listing period at/under previous purchase price

› 1 listing is remarkably still Active

2021

› 24 new listings came on the market

› 17 of those listings eventually Cancelled or Expired (71%)

› 4 of 7 Sold during listing period at/under previous purchase price

An examination of sales prices further illustrates the dramatic rise and fall of the Millennium Tower. Peaking at $3,800,000 in 2015, the median price of 2-bedroom residences has since declined by more than 60 percent to $1,500,000 in 2021. The most recent 2-bedroom residence to trade hands, 301 Mission Street #5A, sold in April 2022 for $1,300,000. As of 15 June 2022, there are a half dozen 2-bedroom listings Active on the market, priced from $1,099,000 to $1,899,000.

It’s been said that where there is big risk there is big reward. To be sure, buying in the tower is not for the risk-averse. But for the investor who sees opportunity in locking in a historically low price, perhaps it’s worth consideration. To take a line from Warren Buffett: Be fearful when others are greedy, and be greedy when others are fearful.