Rendering of the Alexan Icon multifamily project in South San Francisco showcasing modern architecture and amenities.
Kennedy Wilson has secured a $183 million construction loan for the Alexan Icon multifamily project in South San Francisco. This development will provide 480 residential units, including 60 affordable units, on a 4.1-acre site. The project aims to address the housing demand in the Bay Area, offering various amenities and proximity to key employment centers, while reflecting a broader push to increase housing availability amidst rising rents.
In a significant development in the real estate arena, Kennedy Wilson has finalized a $183 million construction loan aimed at supporting the Alexan Icon multifamily project in South San Francisco. This ambitious initiative seeks to address the growing housing demands in the Bay Area by providing 480 residential units, marking a critical step toward expanding affordable housing options in the region.
The Alexan Icon project is set to be built on a 4.1-acre site located at 1587 and 1588 San Mateo Avenue. It will comprise two seven-story buildings, equipped with a total of 560 parking spaces for future residents. Among the features of this development, the project will include 60 affordable units, adding essential options for families and individuals struggling to find affordable housing in the area.
This project promises not only to increase the number of available housing units but also to enhance the living experience for residents. Proposed amenities for the Alexan Icon include a pool and spa, coworking spaces, club lounges, and a unique speakeasy area, catering to a diverse array of preferences and lifestyles.
Strategically located less than two miles from the biotech hub Oyster Point, the project places residents near major employers including Pfizer, Biogen, Genentech, and Amgen. This proximity to key employment centers reflects the project’s potential to attract individuals seeking a convenient work-life balance.
Thomas Whitesell, the head of Kennedy Wilson’s debt investment group, emphasized the strength of the Bay Area’s rental market and its robust employment base. This financing aligns with Kennedy Wilson’s strategy of focusing on multifamily construction loans, contributing to their impressive total of $3.5 billion in loan originations in 2024, including $1.5 billion secured in just the fourth quarter.
In addition to the Alexan Icon project, the multifamily landscape in the Bay Area is experiencing various transformations. A recent proposal at 88 Bluxome St. seeks to construct two high-rise apartment towers featuring 1,500 homes, with approximately 10% reserved for very-low-income residents. This proposal is part of San Francisco’s wider goal, aiming to build 82,000 housing units by 2031 to mitigate a pronounced housing shortage affecting the city.
The situation in San Francisco regarding housing is becoming increasingly dire, with the city’s average rent reaching $3,260 per month—nearly double the national average. Concerns persist regarding the insufficient number of construction projects that meet housing demands, as only 1,200 units were completed in 2024.
With an office vacancy rate stabilizing at 25.8% and apartment vacancies falling to 4.9%—the lowest in a decade—San Francisco’s rental market reflects the urgent need for new housing developments. Over the past year, rent in San Francisco surged by 4.3%, further straining the market amidst limited supply.
Challenges in the housing sector also extend to other ongoing developments. The Midway Village redevelopment in Daly City aims to provide 555 affordable units but faces various hurdles such as rising interest rates and construction costs. Simultaneously, the Martin Building Co. is working on a 303-unit tower at 1101-1123 Sutter St., which includes 101 affordable units. However, this project encountered potential delays due to disputes related to a city water recycling ordinance.
Though rising construction costs and interest rates pose significant challenges, initiatives like Alexan Icon aim to contribute positively to the multifamily housing landscape in South San Francisco, highlighting a determined effort to address the ongoing housing crisis in the region.
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