The refined plans for a 12-story hotel and office building to finally rise upon the long-vacant lot at 1125 Market Street, upon which the former Bell/American/Embassy Theater once stood adjacent to the newly renovated Strand, are one big step closer to reality, with the project having effectively been cleared from an environmental perspective.
That being said, as redesigned by Woods Bagot and Leong Leong for the Pacific Eagle team, the proposed development would yield a 180-room hotel over 5,500 square feet of ground floor restaurant/retail space and 10,500 square feet of co-working office space, the demand and economics for which are likely under review.
And next week, San Francisco’s Planning Commission is slated to approve the entitlements for the proposed redevelopment of the 1125 Market Street site.
From a recently updated “Study of Potential Demand” for the development, which is slated to be flagged an Eaton Workshop and Hotel, which was commissioned by the development team and prepared by The Hudson Group:
“The current situation, as of July 30, 2020, is highly fluid, and hotel demand in San Francisco, and worldwide tourism in general, is being impacted by the COVID-19 pandemic including differing public health policies and perceptions, geopolitical issues, and economic forces, among others, on a macro basis. There is currently a lack of information relating to tourism recovery, which makes demand assessment nearly impossible.
The Eaton San Francisco is not expected to open until 2023…or later depending on approvals, material sourcing, and construction costs. At best, the hotel would open approximately two and one-half years from today. The question at hand appears to when and if it would be appropriate to re-address the demand assessment?
There are numerous articles, models, and projections relating to when demand for hotel accommodations in the US will return to 2019 levels. Recently, nearly all the models and articles indicate a recovery in 2022-2023 and, in the most stressed cases, 2024. Should market demand recover between 2022 and 2024, as is widely expected, then our forecast of demand assessment for the Eaton would be valid, as the 3/20 report indicated stabilization in 2026.
However, what is more likely is that the development of other planned lifestyle hotels in San Francisco will be abandoned or severely delayed as a result of the COVID-19 pandemic, lack of construction financing, economic turmoil, and market demand uncertainty.”
As we said, “under review.” We’ll keep you posted and plugged-in.