Craig D. Ramsey thought he was getting a deal.
In 2016, amid reports that San Francisco’s infamous Millennium Tower was sinking, he paid $13 million for a penthouse there, convinced that once the building’s structural problems were rectified, the unit’s value would soar. The purchase price was a significant discount from the nearly $20 million the previous owner, the late venture capitalist Tom Perkins, spent to buy and build out the unit.
“I knew there was an issue,” said Ramsey, who already owned a smaller unit in the building. “I just thought about the value I was getting.”
Nearly a decade later, that value never materialized. In January, Ramsey resold the unit for $9 million, even less than the $9.4 million Perkins had paid for the property as raw space in 2009.
The loss was a blip for Ramsey, a tech entrepreneur who co-founded a software company that sold to Salesforce for about $1.3 billion in 2020, and who has several other homes. “It was insignificant. I lost a couple million dollars. So what?” Ramsey said. “You move on.”
But the deal speaks to a more pervasive problem at the luxury condo building. The gleaming, nearly 60-story tower was the tallest residential building in San Francisco when it opened in 2009, boasting high-end amenities and views of the Golden Gate Bridge and the Bay Bridge. Then reports emerged that the building had sunk more than a foot and was tilting.
More than $100 million was spent on an infrastructure project that engineers say has resolved the problem and stabilized the foundation as of 2023. However, values at the building haven’t rebounded.
Millennium’s homeowners association is determined to shift the building’s narrative and boost value. They have even hired a public-relations firm to try to widely disseminate the message that the fix is complete.“We’ve gotten so much negative press. We were easy targets—a bunch of people who have been successful in life and then are faced with this challenge,” said Dr. Joel Piser, a longtime resident and president of the board of the HOA. “Now, we have something to counter it with. We have met the project’s objective to stop the building from settling, and we’re recovering.”
By the numbers
The Wall Street Journal analyzed hundreds of public records and transactions, available from real-estate data company PropertyShark, from the past decade for the building, which has more than 400 units.
The comprehensive analysis of resales shows that, of the nine sales that had closed at Millennium Tower this year as of late May, sellers netted an average 20.2% loss compared with what they originally paid for their units. In 2024, the 16 recorded sales at the building netted an average 20.5% loss.
There were 11 active listings at the building as of early June, ranging from $588,000 to $4.995 million, real-estate listings site Zillow shows.
All but two were listed for less than the sellers originally paid.
Early success turns sour
When the units at Millennium Tower hit the market in 2009, the building experienced strong initial sales despite the challenging economic climate following the 2008 financial crisis. Within the first five weeks of sales, the 419-unit tower sold roughly $100 million worth of condos, with prices in some instances recording in excess of $1,500 a foot, high even for San Francisco. Buyers came from all over the world, including a large number from Asia. The building was sold out by 2013.
Located in San Francisco’s East Cut neighborhood, close to the Financial District, Embarcadero and Yerba Buena Gardens, the property was widely praised for its sleek, modern design, luxurious amenities and hotel-style services. Celebrity purchasers included Joe Montana.
“There was incredible energy and enthusiasm about it. And consumers paid very high [prices],” said Gregg Lynn of Sotheby’s International Realty, who has sold numerous units in the tower.
Early owners who decided to sell cashed out for big returns. Those who sold units in 2014 that they had purchased from the sponsor in the early days of sales made a 46% profit on average, while those that resold in 2015 made a 52% profit, according to data analyzed by the Journal.
Then, in 2016, the building’s developer, Millennium Partners, informed residents of the structural issues. The building had settled much further than what the engineers had anticipated because of issues with the soil beneath. By then, it had sunk about 16 inches and was tilting slightly. While the building was never deemed unsafe or uninhabitable, that far exceeded what was considered a normal rate of settlement. The developers said they would come up with a plan to fix it.
Subsequently, “there was a massive amount of finger pointing and litigation,” Piser, the current HOA president, said.
Groups of Millennium Tower owners and the Millennium Tower Homeowners Association filed numerous lawsuits against the tower’s developer as well as the general contractor, the architect and key engineering firms involved in the design, alleging widespread construction defects and misrepresentations. There were also claims against the Transbay Joint Powers Authority, which owners alleged had destabilized the Millennium Tower through excavation for a new rail terminal nearby.
“There were hundreds of lawyers, and the litigation had over 50 parties,” said longtime resident and former HOA president Howard Dickstein. “I went to a hearing where it took 45 minutes for all the lawyers to just introduce themselves to the judge.”
Listings and sales in the building came to a near standstill.
“The vast majority of luxury home buyers simply don’t want to deal with issues of this severity, especially when there are so many other luxury and ultraluxury buildings to choose from,” said local market analyst Patrick Carlisle of Compass.
Lenders also blacklisted Millennium Tower. No bank wanted to be stuck with collateral in a possibly uninhabitable high-rise, and the litigation between the residents and the builders presented another risk.
From roughly 2017 onward, any buyer of a Millennium unit had to either pay all cash or find alternative financing. Insurance premiums skyrocketed.
The trickle of deals that did occur between 2017 and 2020 were typically buyers like Ramsey, who wagered values would recover once fixes could be made.
“There were opinions in early 2017 and 2018 that this is a problem that can be fixed with money,” Lynn said. “People said, ‘If I were to buy a unit at 20 to 30% off of value now, then I could expect that there will be a significant return, though who knows how long it will take.’”
Many are still waiting.
Two kinds of settlement
The underlying structural problems with the building were ultimately solved with money, as was the litigation.
Most of the cases brought by homeowners were resolved under a “global settlement” completed in 2020 between the homeowners and the defendants, including the developers, engineers and Transbay, none of whom admitted wrongdoing as part of the settlement.
While all the terms of the settlement weren’t made public, the key public terms included a mandate that the developer and other defendants fund a comprehensive engineering fix for the tower—specifically, a $100 million “perimeter pile” retrofit—to stabilize the foundation by anchoring it to bedrock.
It was also agreed that the defendants would compensate all condo owners for the plunge in their property values on a per-square-foot basis, but those figures were kept confidential.
For Ronald O. Hamburger of Simpson Gumpertz & Heger, the structural engineering guru selected to oversee the retrofit, the project was unprecedented. It took roughly four years, including delays and work stoppages.
Engineers installed 18 piles to supplement the building’s existing foundation, then transferred the weight of the building onto the new piles, all while the building remained fully occupied.
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“It was like a bumper jack jacking up your car, only they were jacking up 200 million pounds,” Piser said.
A common misconception, Piser said, was that the work was mandated by the city, or that the building was unsafe. In fact, the pile project was voluntary, but the owners opted to do it to shore up the long-term value of their units and erase the stigma attached to the tower. Hamburger, the engineer, said the project was successful. In the last two years, since the bulk of the work was completed, the building hasn’t settled further, he said. It has also recovered nearly 2 inches of tilt. The building will continue to be monitored via sensors for another eight years, he said.
San Francisco’s doom loop
While the broader San Francisco market suffered as a result of the Covid-19 pandemic, few neighborhoods were as affected as those with a high concentration of condo developments, like the greater SoMa area, Mission Bay and South Beach. That has been attributed to a rise in remote work and a dramatic drop in office occupancy downtown.
“All the buyers used to point out the window and they’d be like, ‘There’s my office across the street,’” said local agent Bryant Kowalczyk, who worked on the original sellout of Millennium Tower and has sold more than 150 units there. “Now people aren’t in those offices as much.”
The median price for a condo unit in the Yerba Buena, SoMa and Mission Bay neighborhoods was $866,438 in May, down about 19% from $1.075 million in May 2019, according to data from Compass.
“We can’t really outperform the general real-estate market in San Francisco, but I think our objective is to perform on a par with it,” Dickstein said.
Changing the conversation
It was always going to take some time following the structural fixes for the perception of Millennium Tower to recover in the market, Dickstein conceded. “It was a tarnished brand, and it requires some patience for it to recover in the eyes of insurance companies, buyers, lenders and banks,” he said. “But it’s happening.”
To hurry things along, the HOA board tapped a PR firm, Berg Davis Public Affairs, and commissioned a short film documenting the perimeter pile project, featuring the engineers responsible for the effort. The video also features current residents like former baseball star Hunter Pence and his wife, Alexis Pence, talking about the joys of living at Millennium Tower.
The aim, Piser said, is to get the message out not only to prospective buyers, but also to insurance and mortgage providers, that the building is open for business. He said he hopes to get the building’s liability insurance, once as much as five times the going rate, in line with other San Francisco high-rises. That, in turn, should bring down the building’s HOA fees, making it more appealing to buyers.
Banks, Piser said, are already beginning to return. Citizens Bank provided a roughly $5 million mortgage for the purchaser of Ramsey’s penthouse, for instance.
Kowalczyk said he’s starting to see more buyers interested in Millennium Tower. “The financing aspect has gotten a fair amount of people off the sidelines,” he said. The building “kind of has nowhere to go but up.”
Girish Mirchandani, who works for an investment firm just south of San Francisco, said he fell in love with Millennium Tower’s sense of community and the concierge-style services. Earlier this year, he paid $850,000 for a unit that the seller had paid $1.545 million for in 2016.
While he was aware of the tower’s troubled history, he said two things gave him confidence—the $9 million penthouse purchase and the opening up of lending.
“I figured if someone’s spending that on the penthouse, they’ve done their due diligence,” he said. “Then, when my bank opened up lending there, it made it kind of a no-brainer.”
