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New Restaurants In Hayes Valley Condo Building for Sale: $4.9M

It’s easy money, if the diners show up

A micro-unit studio at 388 Fulton (formerly known as Parcel F in its day as the vacant imprint of what was once part of the Hayes Valley freeway spur) will cost you at least half a million dollars, for as little as 485 feet. The retail space downstairs might actually be a better value, if you can swing $4.9 million for nearly 3,200 feet, that is.

The locations of what will soon be the Starling restaurant and Johnny Donuts in the Feng-Shui compliant David Baker building are now on offer as a package deal for any new landlord who wants to swoop in and nab them.

The building opened in February and has subsequently filled up its residential units. Developer 7x7 now wants to run up some receipts on the ground floor retail that has already attracted tenants of its own.

The Starling is a creation of former 1760 chef Adam Tortosa; Johnny Donuts is a food truck made good, based in San Rafael.

The deal is a net lease investment: The restaurants pick up some or all of the cost of things like maintenance, property taxes, and insurance. In theory, it’s an awesome bargain for the landlord: Just sit back and collect that sweet Hayes Valley rent month after month, and with little or possibly no bother at all about the building itself.

Of course, the catch is that you have to be a supreme degree of confidence in the success of these eateries. If they go under, there goes your cash cow, leaving you with either a broken lease or a debtor tenant. Even in foodie-centric San Francisco, the attrition rate for new restaurants is high.