Two developers think big in SoMa: Plans to add 1 million square feet of office space
San Francisco Business Times
CIM Group and SKS Partners are each looking to build SoMa highrise office towers that could add 1 million square feet in total to San Francisco’s hot office development pipeline.
Both projects fall under the Western SoMa Plan, a set of development guidelines adopted in late 2012 that allow for taller buildings in the neighborhood.
These are the proposals:
San Francisco-based SKS Partners submitted an early plan to the city’s planning department for a 160-foot tall, 688,000-square-foot office building at 610 and 620 Brannan St. The site was previously controlled by Zappettini Properties, a firm that wanted to build a 567,000-square-foot office building on the southeastern corner of the San Francisco Flower Mart. The property partially contains a surface parking lot and smaller buildings occupied by flower market tenants. The parcels together represent less than 10 percent of the Flower Mart facilities.
Los Angeles-based CIM Group plans to demolish an existing, 60,000-square-foot building at 330 Townsend St. and replace it with a 21-story tower that would consist of 383,000 square feet of retail and office with a two-story galleria. The developer bought the brick Townsend building in April of 2013 for an estimated $30 million. At the time, the property was 98 percent leased, but CIM was already looking at its redevelopment potential, stating that the property was zoned for much more space and sits across the street from the Caltrain Station and one block from the Central Subway transit line that is under construction.
The proposals come at a time when San Francisco already has a pipeline of 5.5 million square feet under construction and more than 14 million square feet of office at different phases of the approval pipeline, according to CBRE.
Of the current pipeline, not all of that will get built any time soon as development is subject to Prop. M, a city law that caps the amount of office that can be approved for construction each year. Currently, there is a little more than 2 million square feet available.
Developers are motivated by ballooning office rents in San Francisco, which have doubled in some buildings in the last few years, and the phenomenon of tenants leasing up huge blocks of space in new buildings years before they are completed. The biggest example is Salesforce.com leasing 714,000 square or about half of the 1.4 million-square-foot Transbay office tower. Other early tenants who recently took big leases include Trulia, Macys.com, DropBox, Twitter, Eventbrite and Neustar.