What Happens When You Pre-Sell Condos into a Rising Rate Environment?
Between early 2022 and mid-2023, interest rates surged, buyer confidence tightened, and home sales stalled across most of the Bay Area. But at 25 McAker Ct in San Mateo, Still Property Group executed one of its most precise, de-risked projects to date: the Pacific Gardens Townhomes — a 38-unit rental-to-condo conversion delivered with speed, discipline, and measurable investor success.
This isn’t a story about surviving volatility. It’s a case study in engineering around it.
The Opportunity
San Mateo is one of the most development-constrained cities in California. Land is scarce. Zoning is resistant. And housing costs remain among the highest in the country.
In late 2021, SPG identified a former 38-unit rental building that had previously failed to sell. Our team stepped in with a thesis-driven approach:
- Secure condo mapping prior to close
- Pre-sell 11 units before acquisition to reduce equity needed
- Structure the rest of the project for flexible exit options and accelerated absorption
💬 “When rates move, we don’t pivot—we’re already hedged.”
— SPG Partner, 2024 Fund Webinar
Execution: Risk Off, Return On
Still Property Group closed the deal in January 2022 with 11 of 38 units pre-sold. That capital helped fund the acquisition and eliminate substantial carry exposure during an uncertain macro window.
With in-house construction, direct procurement, and top-tier brokerage alignment, SPG:
- Controlled build costs to $708/SF
- Achieved sale prices of $909/SF
- Sold out the project in just 24 months, even as rates hit 20-year highs
💬 “We repaid the lender in 7 months. That was the risk window. And we closed it.”
— Jack Boyajian, SPG President
The Market Mattered
San Mateo is exactly the kind of micromarket SPG targets across its fund:
- High income / low inventory corridor
- Office and commercial underperformance post-pandemic
- Strong homeownership demand, but limited product
This deal’s structure and absorption strategy only worked because of the microlocation — just minutes from Caltrain, employment centers, and downtown.
What We Learned
- Risk isn’t just market timing. It’s capital structure.
- Pre-sales aren’t just marketing. They’re capital strategy.
- Conversion works best where the exit is already validated.
Want the Full Case Study?
For deal metrics, renderings, timeline, and underwriting details:
👉 Read the full Pacific Gardens Townhomes case study