By now, the redevelopment of Central SoMa as San Francisco’s new growth frontier for jobs and housing was supposed to be well underway. But the Covid-19 pandemic got in the way, stalling the procession of big projects set to rise in the neighborhood under the Central SoMa plan.
It’s only been in recent months that a small project at Bryant and Zoe streets has broken ground. Column starter bars now protrude from the bare ground where a century-old brick building sat as workers and excavators prep the foundation for a midrise office complex. The 50,000-square-foot project at 531 Bryant St. by San Francisco-based Urban Land Development (ULD) represents the first ground-up office construction project to start in the city since the pandemic began.
It also looks like it will be the only Central SoMa project where work will start in the foreseeable future.
The larger projects — the likes of the Flower Mart, Brannan Square and 490 Brannan sites — remain no more than blueprints and artist renderings. Though their developers say they remain committed to completing these projects, none have given a starting date for doing so.
In terms of the entitlements, they are all set to go. They have been granted their square footage under Prop. M, the 1986 voter-approved measure that caps new office space in the city at 875,000 square feet annually. And the big Central SoMa projects were effectively grandfathered in by 2020’s Prop. E, which tightened office limits further.
The projects “have gone through the planning process and have the ability to move forward,” said Richard Sucre, deputy director at the city Planning Department. “It’s now a function of how and when the developers want to proceed.”
But that’s no simple matter. Before they can push the button on development, developers must wrestle with an even thornier issue: Are their pre-pandemic-era plans still viable given the new workplace and public health realities of a changed world?
There’s a lot hanging on their answers.
“Central SoMa is ready to go,” Planning Department Chief of Staff Dan Sider said. “This is where the city has identified where our job growth will be in the next 10, 20, 30, 40 years.”
Ready but waiting
Approved in 2018, the city’s Central SoMa Plan upzoned the historically industrial district for substantial office and housing development with the vision of creating a sustainable, vibrant and transit-oriented neighborhood by 2040.
Under that plan, Central SoMa would see nearly 16 million square feet built for new jobs and housing and more than $2 billion in public benefits, including transportation upgrades, community services and improvements to open spaces.
But in the meantime “there has been a seismic shift in how people work,” Sider said. “Some developers are doubling down. Kilroy’s commitment with the Flower Mart is a sign of that. Other folks are proceeding with more caution.”
Los Angeles-based Kilroy Realty Corp. plans to redevelop the site of the existing Flower Mart at Sixth and Brannan streets into 2.9 million square feet of mostly office space with retail and other uses included. But first, Kilroy is currently building the floral vendors a replacement home a mile south in Potrero Hill. Kilroy will need to finish that new flower market at 901 16th St. before starting on its large redevelopment, Sucre said.
When Kilroy could break ground on its principal project remains uncertain. Kilroy declined to comment.
Trammell Crow Co. doesn’t have a construction start date, either, for its project at 490 Brannan St., a high-rise with nearly 270,000 square feet of offices as well as retail and PDR space.
But the Texas developer, which recently took over the project from San Francisco-based Strada Investment Group, says it is committed to forging ahead and confident in the office market’s long-term trajectory.
“We are actively working through predevelopment and the remaining design documentation,” said Adam Voelker, principal at Crow’s Northern California office. “TCC is optimistic that amenitized locations and innovative buildings will continue to be attractive to companies that believe in in-person collaboration.”
New York developer Tishman Speyer is also looking to advance its two Central SoMa projects “at the point and time that makes sense,” spokesperson Bud Perrone said.
Tishman Speyer has planned Brannan Square at 598 Brannan St. and the project at the former Creamery bistro site at 655 Fourth St.
While the plan for Brannan Square remains as is — three commercial buildings totaling more than 1 million square feet and up to 13 stories high — the developer has recently redesigned the Creamery project. It removed coworking office space of more than 20,000 square feet and a 38-room hotel from an approved plan that featured 960 residential units with ground-floor shops.
The revised plan now calls for 1,148 residential units with retail space. “Tishman Speyer is working with the city on design revisions to the Creamery,” Perrone said. “This focus on a residential and retail execution is more suited to a post-pandemic environment.”
Pandemic-smart design
While much smaller than the other Central SoMa projects, 531 Bryant, scheduled to be completed next summer, could prove to be a prototype for post-pandemic-smart office construction.
The developer believes that the project’s design, emphasizing flexibility and health-and-wellness amenities, will help bring back employees to the office and embrace hybrid work. It also believes comparatively small but high-quality spaces could appeal to tenants who might now see a benefit to opening smaller offices in multiple markets as opposed to one monolith.
The project “is responding to what we understand to be the evolution of the workday and workforce,” ULD Managing Director Susan Sagy said. It’s “very much geared toward the post-pandemic world.”
“Employers can come to their employees as opposed to employees having long commutes to their offices,” she said. “Employers have to go to the employee and not the other way.”
531 Bryant’s health-minded amenities include systems that pump in outside air and filter out contaminants to a high degree, touchless doors and a rooftop garden with panoramic views.
In addition, the building will emphasize a hospitality-like vibe with plenty of comfortable, adjustable space that can be used for group or individual work as well as entertainment.
“The office has to feel as good as or better than home and provide an environment that one wants to be in to see colleagues and collaborate,” Sagy said.
Other developers are interested in incorporating similar design concepts and elements.
“This project is specifically designed to offer maximum flexibility for the workplace designs of the future while offering prime location and exceptional views around it,” said Peter Pfau, San Francisco-based principal and design director for Perkins&Will, architect for 490 Brannan. “The quality of the public spaces inside and outside of the building can be seen as extensions of the workspace, offering opportunities for social meetings and collaborative space.”
Amenity-laden and collaboration-centric office design already gained traction before the pandemic but has only intensified as the Covid-19 era has persisted, Pfau said.
That trend “has a new direction during and after the pandemic as a way to attract employees back into the office,” he said. “We see a desire for a rich variety of spaces, which will enhance social and private engagement supporting in-office time as a meaningful experience.”
Central SoMa outlook
The big commercial projects that have yet to go skyward in Central SoMa will likely not do so anytime soon “unless they have signed major tenants,” said Colin Yasukochi, executive director of CBRE’s Tech Insights Center.
According to CBRE’s Q2 market report, the vacancy rate for Class A office space in the submarket South of Market West — which encompasses Central SoMa — reached 42.4%. In comparison, Class A vacancies citywide was 21.3%.
Perhaps the earliest that a major project in Central SoMa begins vertical construction could be around the beginning of 2024.
“We’re looking at the economy to start turning around the second half of 2023,” Yasukochi said. “Then, that’s going to have to gain significant traction for it to lead directly into real-estate demand. So it would probably be sometime after that when we start to see the impacts on the real-estate market.”
Overall, the long-term forecast remains strong for Central SoMa.
“The outlook there is still as good as it was pre-pandemic, really, because that’s where a lot of new development is going to be directed,” Yasukochi said.
He also noted that the new Central Subway rail line from South of Market to Chinatown — see story, Page 56 — should boost development prospects there.
“Ultimately, the city depends upon mass transit,” he said, “and that’s why these particular developments were approved in the areas that they are in.”
Building 531 Bryant at this time does go against market currents, but ULD CEO Jon Mayeda feels it’s worth doing for the benefit of Central SoMa.
“I get calls asking why we’re building right now,” Mayeda said. “When you’re in real-estate development, you can get caught up in the numbers. But this project helps launch and support a community. We have to continue to look beyond the numbers.”
Neil Gonzales is a Redwood City-based writer.
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