With Barneys New York having declared bankruptcy and shuttered its flagship Union Square store at 77 O’Farrell Street (a.k.a. 48 Stockton) that it had occupied since 2006, plans to redevelop the historic 60,000-square-foot building are in the works.
Designed by Lansburgh & Joseph and built for the Newman & Levinson Dry Goods company in 1909, the six-story building on the southeast corner of Stockton and O’Farrell has served as a department store since it was constructed, including having been Joseph Magnin’s flagship store from the 1920s through 1984.
And while the first and second floors of the building are slated to be reconfigured into a single 22,660-square-foot retail space, the third, fourth, fifth and sixth floors of the building could be converted into 37,402 square feet of new office space with the Strada Investment Group leading the way.
But unlike with the redevelopment of the Macy’s building across the street that’s underway, the original façade of the 48 Stockton Street building would be preserved with a minor modification to the existing employee entrance on O’Farrell Street which would become the entrance to the upper floor office space as well while the corner entrance to the retail space would remain.
FAO Schwartz for many years as well. And on a note of (probably even lesser) historical significance: Newman and Levinson – which later became Newman and Magnin, and then finally Joseph Magnin – had originally planned to occupy this building, but the earthquake put an end to that….the days when a natural cataclysm rather than an 8-figure payout was how you got out of a lease.
I thought the Barneys New York flagship store was in New York.
It’s not uncommon to call the highest-profile location in an important region a “flagship,” even if it’s not the “home store.”
Nordstrom just opened a “Flagship” store in New York City, even though their home store is at the corner of 5th and Pine in Seattle.
It’s actually not uncommon – nowadays – to call practically EVERY location a “flagship”…Barney’s had 22 stores and I think half of them were so described. Retailers have borrowed liberally from the real estate industry in the practice of overusing words until they’re meaningless.
That’s san fransisco, plus i magnin stores were never in NYC
So much demand for office space right now…
And, there is no demand for retail. The developer can only put in what the building is zoned for, either office or retail. Retail has been in a long decline for many years before the pandemic, so you are not going to fill up a 6-story building with retail–the few multi-level department stores are already have a space in Union Square, and even they struggled with their upper-floors.
In contrast, office space will come back. Yes, there will certainly be more flexibility with working from home (and many employers already had working from home arrangements long before the pandemic), but there are real limits to what you can accomplish working from a home office and it is not the answer for every job (and I say this as person who has long worked from home). Working from home is simply not always feasible or even when it is, it is not always the best solution.
“Working from home is simply not always feasible or even when it is, it is not always the best solution.”
How right you are. In 1995, I stepped on my 3″ thick yellow pages to get my Encyclopedia Britannica off the top shelf so that I could use my landline to order a the upcoming year’s version because the four bookstores in my city didn’t sell them directly, and my travel agent had booked a flight out for the next day, so I needed to reorder it now. I told everyone that, in 1995, alternatives were, as you say, “not always feasible or even when it is, it is not always the best solution”. And boy, did that statement turn out to be right, because technology never changes anything.
Tipster, try reading instead of spouting half-baked sarcasm. I said that I work from home. I have had a high-speed broadband connection for years, and recently upgraded to an even faster speed. I have three-monitor set up and fast computer. I have not seen an Britannica since my Dad sold his old collection when I was in first grade. So, yes, I understand technology changes and I stay on top of it. My point is still 100% accurate. Working from home is not always feasible, and even when it is it is still not always the best solution. Why do you think Amazon, POST-pandemic, just learned hundreds of thousands of square feet in Manhattan? Why do you think Facebook, POST-pandemic just leased over 700,000 square feet in Manhattan?
I’ve adapted quite well to working from home. I have not adapted well to the lack of social contact with coworkers.
Two friends have started new jobs during shelter-in-place and do not feel well integrated with their teams.
Physical presence has tangible benefits. Maybe the ultimate takeaway will be more flexibility rather than a complete abandonment of office space for the information sector.
Do I detect a hint of sarcasm?
And now for a minority report, from a startup founder and someone (presumably besides Chris) else who is involved in real estate development, regarding remote work:
See, first, there’s a dribble, then startups see an opening to develop technology to facilitate the dribble, that tech gets traction, and then the dribble becomes a deluge. Scare tactics like “working from home is simply not always feasible”, even if it’s true now, are getting less salient every day.
Even if they believe that “office space will come back”, the proponents of this project have to believe that there will still be positive office space absorption over 2019 levels in order to make this project work out.
Brahama, okay, so Facebook and Amazon just decided to commit hundreds of millions of dollars to sign massive leases, again POST-Covid 19, for the hell of it? Also, again, I work from home! I have worked from home for several years now. I understand you can accomplish a lot from working from home, but it is NOT the solution for every job. And, how is my comment a “scare tactic?” I am not a real estate developer, so I have zero incentive to discourage people from working from home. I agree that some jobs can be done working from home–I HAVE one of those jobs. I am simply making the point that not EVERY job is suited for working from home, and there will still be need for commercial office space.
What world do you live in that a common observation is labeled a “scare tactic,” or do you just not understand the meaning of that phrase.
Look, maybe, you and Tipster, sell home office furniture or something, but your responses have been absolutely bizarre.
Chris, you’re right. The “scare tactics” part would have been better directed not to your specific comment, but to sarcastic sentiment like this (presumably from someone profiting handsomely from the idiotic desire of some tech firms to keep packing people into open plan offices, elbow-to-elbow with each other):
The thing is, a lot of tech jobs that were considered “not always feasible” to be worked remotely in the Before Times have been worked remotely over the past six or more months and the sky hasn’t fallen. But I’ll bet commercial rents are about to.
For what it’s worth, the company I currently work for (It’s not a company the size of either Facebook or Amazon) is joining a growing list of companies who are giving up or reducing S.F. office space due to the success of remote work and our lease is not up for renewal. The CFO thinks he’ll be able to sublease the space, so I’ll have second-hand knowledge of whether or not commercial rents are declining (granted, observation = 1).
There’s about 6 million feet of office space for sublease in SF as of May. A big jump from last year. All this as companies vacate all or part of their SF footprint. I believe that number does not include PG&E which is moving to Oakland soon and will add an additional large chunk of space to the available pool. It does not include the almost half million feet of space that Pinterest recently backed out of at 88 Bluxome. That project has not broken ground and it’s now not clear if the developer will go forward with it. Unfortunately for the developer of [the Oceanwide tower at 50 First Street] it is under construction and will have almost a million feet of space. The developer can’t back away and don’t be surprised if companies who have pre-leased space there end up pulling a Pinterest. How easily the CFO of your company will be able to sublease the space is an open question.
Not quite.
While a significant jump versus the same time last year, there was around 3.9 million square feet of space on the sublease market as of the end of the second quarter. But with another 4.4 million square feet of yet to be leased space, the office vacancy rate in San Francisco has been hovering around 10 percent, which is the highest it’s been since 2012 and versus a vacancy rate of 5.4 percent at the same time last year.
And with respect the Oceanwide tower that’s rising at 50 First Street, there are no pre-leases to be broken for its million square feet of space. There are no pre-leases to be broken for the 630,000 square feet of office space that’s rising at 415 Natoma Street, the first phase of the massive 5M development, either.
As regards Oceanwide’s Claw, I’m surprised there aren’t any pre-leases. Given recent history when a large chunk of space in yet to break ground buildings was pre-leased. For instance 88 Bluxome. The Claw could become one of those infamous see through skyscrapers. Given all the space for sublease it seems some of these companies will take a big discount in what they ask for rent – a better option than than breaking the lease. Will Facebook end up continuing to occupy all the space it took at 181 Fremont? Office rental rates have remained stubbornly high despite the growing sublease market even prior to Covid. There could be a significant drop in office rent coming. All of which bodes especially bad for office projects set tp break ground this year (Bluxome) or in the next several yeas. It’s a good bet that Bluxome at least gets delayed.
NYC offers a better deal. Companies will go wherever to save bucks now. The idea that the best and brightest reside in the Bay Area for tech is about as outdated as a Yahoo homepage.
Why did a property developer in Tempe need an office in San Francisco to begin with?
Well if they really want to clean up, turn the “retail“ space into “The Museum of TikTok.”
UPDATE: And in directly related news, Plans to Expand and Convert the Bro’s Building on Stockton.