Every TIC listing in San Francisco carries the same shorthand. Ten to twenty percent below a comparable condo, sometimes as steep as thirty. Buyers treat that number as a single fact about the building. It isn't. The same discount on a two-unit Victorian in Noe Valley and a five-unit Edwardian in the Mission is pricing two entirely different bets, and the difference has nothing to do with the kitchen or the light.

It comes down to a number most buyers never ask about until an agent brings it up: how many units are in the building.

The Same Percentage, Two Different Products

From January through May 2026, 120 TICs sold across San Francisco at a median price of $1.2 million. Ninety-three of those sat in buildings of three or more units, and they closed at an average of 7.5 percent above list, a sign of real competition for that kind of inventory. Sales concentrated in a handful of neighborhoods where condo prices run considerably higher: Noe Valley and Eureka Valley, the Mission and Mission Dolores, the Marina, and Nob Hill and Telegraph Hill.

Only one TIC sale in that window crossed $2 million: a two-level penthouse at 430 Greenwich in Telegraph Hill, three bedrooms, two-car parking, city and bay views, and a private elevator. Seventy percent of TIC sales closed below $1.5 million. As of that early-June snapshot, 37 TICs sat active in buildings of three or more units, ranging from an updated one-bedroom at 234 27th Street in Noe Valley listed at $699,000 to a fully renovated three-bedroom flat with parking at 3052 California Street in Pacific Heights offered at $2.3 million, against an average Pacific Heights condo price near $3.2 million. Fourteen more TICs sat in two-unit buildings.

That last split matters more than any price tag. A two-unit building and a five-unit building can carry an identical discount on paper, but only one of them has a realistic, dated path to converting that discount into a deed you can finance like anyone else's home.

What the Loan Structure Actually Tells You

Before the discount, check the financing, because it tells you what kind of risk you're actually buying.

TIC lending used to mean one mortgage on the whole building, with every owner jointly liable for the others' payments. If one owner stopped paying, the lender could pursue everyone. That structure is largely gone. Individual fractional financing is now the standard: each owner secures a separate loan against their own percentage interest, and a co-owner's default stays contained to that owner's share.

As of mid-2026, only three banks actively originate these individual TIC loans in California: Sterling Bank & Trust, First Republic (now under JPMorgan but still writing TIC loans), and Comerica Bank, with a few more reportedly building programs. That's the entire lender pool for a fractional interest in a building, not three among hundreds.

If a listing agent can't confirm the building already has individual financing in place, that's a question worth answering before you write an offer, not after.

The Lottery That Keeps Not Happening

Here's the detail that changes how you should read any TIC discount: San Francisco's condominium conversion lottery, the mechanism that turns a TIC into a condo for buildings of three to six units, has been suspended since a 2013 moratorium. A follow-up program meant to bridge the gap, the Expedited Conversion Program, ran briefly before a 2017 federal lawsuit over its lifetime-lease requirement brought it to a near halt. For years afterward, legal commentary on the subject kept repeating the same forecast: the lottery would resume in 2024, 2025, or 2026.

It is now August 2026, and it still hasn't resumed. As of mid-2026, the annual lottery for three-to-six-unit buildings remains largely suspended, with the city instead prioritizing the stalled Expedited Conversion Program.

Two-unit buildings are a different story entirely. Under Planning Code Section 1396.3, a two-unit building where both TIC owners have occupied their exclusive-use units as primary residences for at least 12 consecutive months can bypass the lottery altogether through an administrative process, no random draw involved and no annual cap on approvals. The clock resets if either owner moves out, even briefly, and a building where any owner has used an Ellis Act eviction within roughly the past decade is generally disqualified. But for a qualifying two-unit building, conversion is a matter of paperwork and time, not luck.

That's the real difference behind the identical-looking discount. A 10 to 20 percent gap on a two-unit TIC is a discount with an expiration date, one you can plan around. The same percentage on a five-unit building is a discount you're accepting indefinitely, tied to a lottery that has now missed its own predicted return by more than a decade.

A Flat Condo Market Changes What the Discount Is Worth

Timing adds another layer. Closed sales through June 2026 show San Francisco's single-family home median climbing 26.47 percent year over year to $2,150,000, the strongest annual gain of the year so far. Condos over the same month rose just 0.63 percent, to a median of $1,200,000.

That gap matters directly to TIC math. If you own a two-unit TIC and convert it to a condo, the value you unlock is priced against whatever condos are worth at that moment, not when you bought in. In a flat condo market, the locked-in gain from conversion is real but modest, roughly 10 to 20 percent of a home valued around $1.2 million works out to somewhere between $120,000 and $240,000. In a rising condo market, that same conversion captures more. Right now, the payoff for the buyers with a genuine exit path is smaller than it would be a year from now if condo prices start moving the way single-family homes have.

For anyone sitting in a three-to-six-unit TIC with no lottery in sight, the discount isn't a future gain at all. It's simply the price of admission to a neighborhood, paid once and held indefinitely.

A Short Checklist Before You Write an Offer

• Confirm whether the building has individual TIC financing in place, or still carries a shared master mortgage
• Ask how many units are in the building, and if it's two, confirm both owners' occupancy timeline against the 12-month bypass requirement
• Request the TIC agreement itself, current operating budget, reserve balance, and the last 12 months of meeting minutes
• Check whether any unit has an Ellis Act eviction on record, which can disqualify a two-unit building from the bypass path
• Have a real estate attorney review the TIC agreement before you remove contingencies, not after

One quiet detail worth knowing before closing: under California's Proposition 13, a change in ownership on a TIC only triggers reassessment on the percentage that actually sold, not the whole parcel, and the city typically sends a single Notice of Assessed Value for the building each July. San Francisco's own guidance on how TIC parcels are billed and assessed is worth a read before you sign anything.

FAQ

Does the discount mean the home itself is worth less than a comparable condo? No. The physical unit is the same. The discount reflects financing complexity and, in larger buildings, a conversion path that isn't currently available, not the quality of the space itself.

Can I count on my TIC eventually converting to a condo? Only if it's a qualifying two-unit building with both owners meeting the 12-month occupancy requirement. For buildings of three to six units, the lottery that would allow conversion has been suspended since 2013 and, as of August 2026, still hasn't resumed despite years of predictions that it would.

Are TICs equally common across San Francisco neighborhoods? No. They concentrate in older multi-unit buildings, particularly Victorians and Edwardians, in neighborhoods like Noe Valley, the Mission, and parts of Pacific Heights and Telegraph Hill, where a full condo conversion history never happened for the whole block.

If you're weighing a TIC against a condo in one of these neighborhoods, the unit count and the financing structure will tell you more about what you're actually buying than the price sheet will. Griffith Partners works these transactions across the Peninsula and San Francisco with the kind of document-level scrutiny this decision requires. Reach out when you're ready to have someone read the fine print with you before you write the offer.