This 5-acre property was jointly owned by CalPERS (California Public Employees’ Retirement System) and one of Mr. Choo mortgage investment funds, CMR Commercial Mortgage Fund, LLC.TheLas Vegas Convention and Visitors Authority (LVCVA) notified the group that they were going to acquire the property through eminent domain at a $7 Million valuation (appraised by their in-house counsel). As this was a case of eminent domain, CMR and CalPERS were not able to refuse to sell, but Mr. Choo recognized that the $7 Million appraisal was grossly underestimating the fair market value of the subject land. He obtained another appraisal for $15 Million that properly assessed that the site was not just land but should have been assessed as convention center expansion land. LVCVA agreed that this was a fair and proper assessment and purchased the land for $15 Million in 2012 and has since expanded the Las Vegas Convention Center.
In 1989, David acquired a 15,000 SF office building in Downtown Oakland, despite rumors that the site was part of a plan for a new state office building. David had planned to create an assemblage starting with this site, but the new state office building proposal went through and ultimately the subject site was purchased by the City through eminent domain proceedings that was settled through a negotiated sale transaction. The 740,000 sqaurefoot, 328 feet tall , 22-story Elihu M. Harris building was completed in 1998 and this and the other neighboring sites.
Mr. Choo’s acquired a 40% interest in this 75% vacant office building in 1987 and within two years, achieved nearly 100% occupancy within two years.
In 1997, David took over the servicing and management of a defaulted portfolio of construction loans that he had not originated but which had been funded by private investors of Lord Financial, a commercial construction finance lender based in San Francisco. The portfolio included a partially constructed project, consisting of twelve townhomes, which Mr. Choo completed and sold. Through this effort, David was able to recoup nearly all the investors’ original capital.
David acquired 63 acres of land with frontage on Highway-128, directly behind the Christian Bros. Winery (now the Culinary Institute of America at Greystone). David submitted a proposal to subdivide the 63-acre site into twelve 5-acre luxury home sites. The goal was to leverage the local vineyards and possibly create vineyard estates. The property was unfortunately lost during the 2008 Financial Crisis.
Mr. Choo had a 130,000 SF office building with mountain/alpine architecture ota 15-acre site located in Scotts Valley, California, about 20 miles south of San Jose and the southern end of what is known as Silicon Valley. Scotts Valley was previously the headquarters location for Borland Software, a significant competitor to Microsoft before losing the software wars. However, the Target Store chain offered to acquire the property subject to re-entitling the property for a 130,000 sf Target Store. While the new retail project was working itself through the entitlement process, the 2008 downturn prevented Mr. Choo from supporting the property through the approval process and property was lost to foreclosure in 2008
Development & Project Exit: The high-rise building site, located at the East end of the Transbay Terminal project, was acquired by the Pritzker Family of Chicago. The building site had already been entitled for a 22-story, 400 foot tall, 200,000 SF office building and when the Pritzkers decided not to build the office building, Mr. Choo saw an opportunity to acquire the site and potentially three other neighboring sites –all part of the Transbay District Area Plan.
Location: Mr. Choo acquired the building site at 524 Howard St for $22.5 Million in 2007 and explored acquiring the other neighboring sites. However, the 2008 downturn resulted in the property being lost in foreclosure.
Other Notes: The site was acquired acquired by Crescent Heights, another large developer out of Chicago. They proposed and received entitlements for a 495-foot-tall residential tower. It has since come part of the Transbay Redevelopment Project Area. The Project Area Is located south of the Financial District in San Francisco, runs 4 blocks by 2 blocks and is approximately 40 acres in size.The project area is home to the Salesforce Tower and includes Salesforce Park. Crescent Heights sold the project site in 2019 for $78 Million, more than 3 times what Mr. Choo had paid in 2007 prior to losing the property in 2009.
Background: The Market-Octavia plan was expected to rezone certain properties near the intersectionof Market Streetand Van Ness Avenue, the two largest streets in downtown San Francisco and increase the building height limits from 120 feet to 400 feet. Please be careful about the punctuation and abbreviations
Development: Mr. Choo formed an investor group that acquired 4 parcels in two separate transactions from two different owners. The group hired Richard Meier, the Pritzker Prize-winning architect, to design a 34-story signature high-rise residential tower.
Project Exit: Unfortunately, the 2008 downturn resulted in the majority of the investors deciding to sell the property The group had paid $13.7 Million for the project site and sold for $37 Million.
The San Francisco Transit Center District Plan (“TCDP”) was an ambitious redevelopment plan that was adopted by the City of San Francisco in 2005. The hope was to invigorate the improvement of the South of Market area in downtown San Francisco by providing financing and development incentives such as height limit and building area density increases to exceptional projects. As a testament to this effort, the area’s most prominent development is currently the Salesforce Transit Tower, a 1,070-ft tall office skyscraper, the tallest building in San Francisco.
David purchased the first of seven parcels at 62 1st St. in San Francisco in 2003. This was done in part to help better position his mortgage lending business in the San Francisco market, but was also done in anticipation of the TCDP plan that would eventually be adopted. The site was not large but was located right in the heart of the downtown financial district of San Francisco. This site was one of the most promising sites available in the downtown San Francisco area and remains so to this day.
David proposed a 915-ft tall office building and 610-ft hotel & residential building for a total of 2.4 Million square feet of building area on these seven parcels. The allowed FAR (Floor Area Ratio) was 18:1, which would allow for approximately 925,000 SF of building area to be built. Despite the proposal requesting both significant height limit and nearly triple the allowed building area, the proposal was approved, and David was permitted to move forward with development plans.
Like many others, David was heavily impacted by the 2008 Financial Crisis and was ultimately forced to sell the project site to Northwood Investors and TMG Partners for $122 Million. 17 months later, the group sold the site to Oceanwide Holdings for $296 Million without having built anything or furthered the development plans. Oceanwide was the 5th largest developer in China and has since pushed plans to develop the site into Oceanwide Center, which will include the 169-room Waldorf Astoria San Francisco Hotel and approximately 150 residential units.
Even though David was unable to see the project through to completion, the subsequent sale to Oceanwide clearly demonstrates that the project site was a valuable one and that David’s intuition and judgment were spot-on regarding the opportunity.
