Billionaire surfaces with San Francisco rentals

SAN FRANCISCO — The apartments at City Square in Cupertino, Calif., feature an on-site gym and private decks that overlook the property’s amphitheater, Olympic pool and spa.

The gray, five-story luxury building, where a second-floor two-bedroom apartment was recently listed for $3,293 a month, is “the perfect home after every amazing, exciting, exhausting day” in the town where Apple Inc. (Nasdaq: AAPL) employs 15,000 people and more than 60 other technology companies have offices, according to a listing on Prometheus Real Estate Group’s website.

Prometheus owns about 11,000 similar residences across the San Francisco Bay area, making it the region’s largest closely held owner of apartments, according to its website.

Founded in 1965, the company has a value of $2.3 billion, according to data compiled by Bloomberg, and has made its 86-year-old founder, Sanford Diller, a billionaire.

“We have a steadfast policy as a family and business to not release our net worth and keep all financial information private,” Jackie Safier, Diller’s daughter and Prometheus’ president, said in an August email.

Prometheus, which Diller owns through a revocable trust with his wife, Helen, according to court documents and regulatory filings, controls buildings in cities such as Santa Clara and San Jose, where average monthly rents are about $2,500, and Mountain View and Cupertino, where they approach $3,000 a month, according to data compiled by apartment-researcher Axiometrics Inc.

‘Phenomenal growth’

Vacancies are lower, rents are rising faster, and property values are higher in the Bay area compared to national averages according to Stephanie McCleskey, vice president of research at Axiometrics.

Rents grew at a rate of 7 to 11 percent year-over- year in Bay area cities in August, compared to 4.1 percent nationally, she said.

“It’s absolutely phenomenal growth,” McCleskey said. “New apartments are filling up about twice as fast as they are in other parts of the country.”

Diller began developing and acquiring real estate in the mid-1960s after getting a law degree from the University of San Francisco.

Today, his apartment properties run up and down the West Coast from Los Angeles to Seattle, according to Prometheus’ website. It also has 807,144 square feet of office space in the San Francisco Bay area.

Prometheus wholly owns about two-thirds of the 17,581 apartment units it operates, and manages other properties on behalf of Northwestern Mutual Life Insurance Co., billionaire John Sobrato and others, according to its website.

Expansion plans

The company is building units in Mountain View, Calif., where Google Inc., (Nasdaq: GOOG), the world’s largest search-engine company, is headquartered.

It operates 1,684 apartments and plans to build 526 additional units in the city, according to an article posted on its website.

“Quarter after quarter after quarter, the top multifamily markets are New York and San Francisco,” Keven Lindemann, director of the real estate group at Charlottesville, Va.-based SNL Financial.

“Strong employment figures translate into significant demand in the multifamily market,” he said.

The average sale price for San Francisco apartments since 2013 is $322,462, Lindemann said.

Family foundation

The billionaire made headlines in 2003 when he and his wife Helen donated $35 million to construct a cancer research center at The University of California San Francisco, the largest-ever donation to the school.

The Helen Diller Family Foundation continues to donate to Bay area Jewish causes and had $37 million in assets according to a 2012 tax filing.

It’s a member of The Jewish Community Federation of San Francisco, the Peninsula, Marin and Sonoma Counties, where Diller’s son-in-law, Dan Safier, is a director.

The federation had $675 million in assets in 2012, according to a filing.

“If there’s one concern, its what happens if employment growth slows down,” SNL’s Lindemann said.

Article source: http://www.sddt.com/RealEstate/article.cfm?Sourcecode=20140918fai&_t=Billionaire+surfaces+with+San+Francisco+rentals

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