Once again, don’t panic, The Warfield Theater itself isn’t being converted into condos a la the Lighthouse development across from Dolores Park. But plans to convert 25,000 square feet of the Gustav Albert Lansburgh designed Warfield Theater Building’s commercial space at 988 Market, across the top five floors of the building, fronting Market Street and including two floors which share walls with The Warfield’s auditorium, into residential condos are back on the Boards.
Effectively in the works for over a decade, Group I’s plans for the building would yield 34 condos, a mix of 15 studios, 9 one-bedrooms, 5 twos and 5 threes, with a second floor gym; seventh floor roof deck; and basement parking for 34 bikes.
And while a surreptitious conversion of the theater building was previously stymied by existing land use plans and zoning, legislative changes, “to facilitate the conversion of commercial buildings to residential uses,” are expected to be adopted this year. But don’t get too excited, it’s not zoning that would prevent the vast majority of existing office space in San Francisco from being converted into residential space but basic economics. Regardless, we’ll keep you posted and plugged-in.
What kind of masochist would want to live on Market and 6th?
Oh my, they should book Orbital into the Warfield again and determine if that’s a good idea. In the meeting they’ll need to use sign language for those who forgot to bring ear plugs to the show.
It is more feasible to convert a building with a small floor plate, such as this one, because it can be re-architected in a way that every unit has significant natural light, right? This building is also an odd shape and has more windows, which makes it a better candidate?
I would submit that mostly what it has is ownership that acknowledges it has little, if any, future as commercial space.
And speaking of which, and offered with no further comment https://www.governing.com/community/can-a-city-thrive-when-its-downtown-is-empty
Do we believe that everybody was making a huge mistake spending $80 a square foot for San Francisco real estate when they didn’t need to?” asks Egan, the city’s economist. “I’m a little skeptical that it really is going to be permanent.”
… Egan himself has moved to Davis, about 75 miles northeast of City Hall, and does not drive in every day. (emphasis added)
Indeed. However, even if a building is not viable as a commercial offering anymore, it’s not so simple to convert it to residential.
Seems like this building is the best-case scenario – lots of windows, small floorplate, cute and interesting exterior.
The worst case scenario is a large floor plate and somewhat older building with smaller windows. I’m thinking the Uber or Square office, which I believe was the largest floorplate in the city, and is somewhat drab.
I believe the floorplates (there) are about 100K gsf, tho it’s really the amount of space distant from the
exterior that matters, than the area per se
That having been said, the similarly sized
Capwell’s‘Uptown Station’ in Oakland was repurposed by creating an atrium. It’s not like putting a car onto Mars.Not even close. The project’s applications state that approx 42,000 SF over 5 floors is the GSF. That is less than 10,000 SF per floor.
I personally know a dozen city workers who are allowed to telework 3 or 4 days /week and who have decamped to the East Bay. They did so because housing is cheaper, schools are better and there is less crime. Egan going to Davis, that far, may be because housing costs are cheaper in Davis than than most of the Bay Area.
Mr. Egan may well have one of a hundred personal reasons for moving there – I rather doubt his postion doesn’t afford him a compensation that allows something closer – but the main point is ***IRONY ALERT*** his doing the very thing he feels will be transitory. Or at least claims he feels that way.
Who cares? Egan could believe the murder rate will go down and go on a murderous rampage and still be correct in his prediction. He’s one person. His individual actions are irrelevant when it comes to predicting the aggregate behavior of hundreds of thousands of people.
You mean redesigned. Architecture is a noun, not a verb.
San Francisco is at or near the bottom in terms cities and how well they’ve recovered from the pandemic. Numbers like percentage of workers who’ve returned to their downtown physical offices. It’s a huge problem, Mayor Breed has proposed a path forward to revive downtown which includes office to residential conversions where practical. But the economic reality is that, unlike this case, most newer office towers can’t be converted to residential use. And that begs the question as to how much new housing will be needed in the future if SF’s population continues to decline over an extended period.
Yesterday the Mayor proposed converting offices to lab space/biotech. Calling biotech the future for SF. High rise towers are not good candidates for biotech conversion, but the shorter office building dotting SOMA are.
At least the City realizes it’s up the creek and needs to urgently find solution to fill the empty offices – Slack just announced it’s giving up its 250K of space at 500 Howard. Residential conversion such as this as well as biotech repurposing, though not feasible for much of the empty office space, may be the only option at this point.
“At least the City realizes it’s up the creek and needs to urgently find solution to fill the empty offices”
Businesses that have an actual viable business model (thus excluding most SF startup semicorns that will just go where pets dot com has gone) will continue downsizing, consolidating, outsourcing, and relocating, until SF landlords lower their commercial and residential rents enough to compete with the cost of living and doing business in other locations.
“But the weather!,” “the food!,” “the schools!,” and “the boba joints!” are no longer tenable supports to justify the still absurdly high rents with the already historic and increasing vacancy rates.
Of course, with tax incentives, shell company manipulation, loan penalties, decades of malinvestment, and algorithms like RealPage optimizing rents and vacancy rates for maximum landlord profitability, rents are “sticky” on the way down, obviating the mechanism of “simple supply & demand” that some people believe magically maintains equilibrium and maximizes the supposed social benefit of “free markets.”
Residential and commercial vacancy taxes (with reasonable exclusions) might be the quickest way to kick in the magical supply & demand mechanism which seems to obtain on the way up, but goes AWOL on the way down.
SF does indeed realize it’s up a creek and thus might actually work hard to hit it’s 82K housing goal.
New housing construction should lower rental prices over time, enticing more people to move here. It also brings in much needed tax revenue, more foot traffic, more security, more beautification, more lighting, more permanent jobs (security, maintenance), and more residents consuming goods locally. Building housing will solve so many problems at once.
Separately, I think we’ll see looser regulations around demolition and rebuilding of large single family homes. Take 115 Belgrave St. The owners were paying ~$2K/year in taxes back in 2010. Once the new mansion is done, I imagine it will be at least a $10M home with an *annual* property tax bill of ~$100K. That one rich person / family is now singlehandedly paying for the salary of a city employee.
That one rich person / family is now singlehandedly paying for the salary of a city employee.
‘cept next negotiating round it will be seen that revenue went up 100K and – guess what?! : salary demands will go up by $100K…or more.
Think of it as “trickle up” economics
considering that thousands of city employees make well over $100K and hundreds over $250K, im not so sure
… and salary is not the only cost for an employee. There’s overhead (HR, facilities, office lease, utilities, etc.) as well as other forms of compensation.
That won’t happen. The city just last year made over 2700 square feet have to be 2 units in all of the “central neighborhoods”. No Monster Houses in extra units guise. if anything that will expand to other neighborhoods. It’s way less high dollar houses, and less overall getting built, and what does will go through MORE slow steps (conditional use, etc).
I would bet on attempts to reduce the vacant unit tax from 3 unit to 2 before allowing bigger houses and less regulations. Which will fix any loophole in the No Monster House rules.
Right, one could not obtain that Belgrave Building Dept permit nowadays. Full stop.
its probably even less economically feasible to convert office buildings to lab space. and im not sure many biotech companies want to be in SF. SSF has been expanding greatly and has better tax policies, parking and is much safer. not to mention, the closeness of 250 other companies.
Some buildings can be converted as is happening with the former Old Navy headquarters. Mayor Breed mentioned she will push for conversions for those buildings than can be adapted. Pier 70 is stalled indefinitely. It’s almost 2 million feet of planned office space is a white elephant now. Look for that space to be re-imaged as biotech space. Easy to do as the structures have not been built.
It’s true SSF and the north end of San Mateo County are getting/will get the lion’s share of new biotech development. Millions of feet in the works including well over a million feet to be built at the Tanforan Shopping Center and a million feet now being built in SSF on El Camino across from the See’s factory. Still, the City has little choice but to go after some of that sub-market.
Biotech or bust, eh? If only there had been a recent global event that had demonstrated the critical economic and social necessity of minimizing dependence upon complex, international supply chains to expediently and reliably deliver vital goods, parts, and resources.
Exactly, which is why a manufacturer would choose Fremont or San Leandro or a logistics center would pick Stockton to service the Northern California region.
San Francisco has extremely high costs for housing, limited areas to put industry (or really anything since it covers a small densely built up area), expensive rent, high labor costs, high taxes, dysfunctional local government, congestion, and burdensome business regulations—and then add on all the other quality of life shortcomings.
The city has a tough road ahead to attract new industry.
IOW, SF is too expensive for businesses that it formerly supported because it is too expensive for businesses that it formerly supported. Thank you for illustrating a rhetorical device in which the end point of the argument is the same as its premise. If only there were a name for such an ingenious technique…
Biotech is typically early stage research new drug discovery R&D. It is more lab oriented than the manufacturing and production of pharmaceuticals. There are almost no existing office buildings in SF that are suitable for bio-tech conversion. Bio-tech requires chem labs, and bio labs. The lab space requires extra high ceilings for fume hoods for venting with duct space. Conventional office buildings, even medical office buildings used by physicians, almost never are the right fit. SF just doesn’t have that kind of building stock, which means buying old ugly industrial and demolishing and redevelopment. Most NYSE listed corporate developers of biotech facilities don’t want to be in the Bayview where the zoning supports it. Then there is the SF priority for housing first, which means potential redevelopment sites like Candlestick Park will probably get used for non-profit housing development.
agree with fact. little chance of office buildings being converted to biotech. spme dogpatch warehouses or bayview probably can, but i dont think theres a strong apetite to move there for any companies. There are also some incubators in SF that are not full so anyone starting a new enterprise would either go for shared space in these are more liekly to SSF. People in biotech are also in generally older than tech start-ups, and have families and most dont live in SF. its not a desirable place for biotech
Two beers, speaking of rhetorical devices, what do you actually have to contribute, as in concrete plans for the city or guidance. I see you on head a lot pitching a b**** and working through issues with some bad relationship you have with realtors (was your mom one?), but I never see any suggestions from you. Just sarcasm and huffing. Maybe, this forum is simply your venue for therapy, and that is fine, but I an genuinely curious if you have any helpful ideas.
Thank you for the personal attack, Chris (btw, ad hominems reveal more about the hurler than the target).
No, I’m not part of the rah-rah crowd here. You will probably never understand my argument, as explained in Upton Sinclair’s famous epigram on cognitive dissonance sometimes quoted here. Believe it or not, some of us who comment here are not members of the banker/builder/landlord/agent/speculator cohort, nor are we imminent home sellers or buyers. We see things very differently than you do, because our income or wealth depends on different sources. Yet, we are still very interested in local real estate issues, as they impact our lives and the lives of people we care about. I’m sorry if you feel as though we are intruding on your club, but our observations are no less valid than yours.
Rather than throwing darts at a board trying to come up with a quick fix for what you seem to perceive as the Big Problem (which, correct me if I’m wrong, is how to “revitalize” downtown, which as a consequence means how to prop up real estate and rents), I see the Big Problem as the local social havoc wreaked by the continuance of the same ol’ class war that appropriates wealth from the people who create it via exorbitant rents (as observed by those notorious commies, Adam Smith and David Ricardo).
The solutions to what I see as the Big Problem are different than your solutions, because we see different Big Problems.
For example, your statement, “The city has a tough road ahead to attract new industry.” I agree entirely. But you seem to see limit “industry” as only those businesses staffed by workers with post-graduate degrees. Why is that? Possibly because only businesses that employ those types of workers can justify the prevailing exorbitant residential and commercial rents? Yet, there are many other industries SF could attract (I’ll cut you off at the reductio ad absurdum pass, and exclude oil refining, iron smelting, and other heavy industries), but those industries can’t viably pay the currently-expected exorbitant commercial rents, nor pay their employees enough to justify the currently-expected exorbitant residential rents (let alone acquire RE).
Btw, most of the tech darling uncorns and semicorns can no longer viably pay the currently-expected exorbitant commercial rents, nor pay their employees enough to justify the currently-expected exorbitant residential rents, which is why, with higher interest rates drying up the VC magic money machine, most “tech” companies are now downsizing.
You see a different Big Problem than I do, so you think the downtown crisis is caused by “high taxes, dysfunctional local government, congestion, and burdensome business regulation,” whereas I see it as caused principally by the Federal Reserve winding down its monetary policies that blew the tech bubble (and corresponding RE bubble) to begin with.
Where I see speculative asset bubbles that destroy the working classes, you seem to see organic growth that can only be impeded by “high taxes, dysfunctional local government, congestion, and burdensome business regulation.”
We see different Big Problems, so we have different “helpful ideas.”
But what are your “helpful ideas”? You didn’t mention a single one, which is what Chris asked you for.
Ideas to address which problem? Revitalizing downtown? To most here, that means rekindling a historic asset bubble (the creation of which sowed the seeds of its own destruction). To others, downtown can be revitalized only by eliminating the economic injustice of the class war waged against those who don’t generate wealth through high value assets or have the implicit earnings potential of a post-grad degree.
You want to revitalize downtown? Lower residential and commercial rents, and I don’t mean by 1% over six months? Implement residential and commercial vacancy taxes, with reasonable exclusions for market share and certain uses? Ramp up the rental inventory report (where the hell is it?!), and expand its reach. Outlaw vacancy-inducing, high rent market-rigging (e.g., RealPage)? Eliminate use of vacant property as tax losses against other profits? Tax the cr@p out of short-term rentals? Tax unearned income at progressive earned income rates? Eliminate the affordable unit component buyout? Compel the affordable unit component to be on-site? Prevent the reduction of even one more sq ft of PDR-zoned land? No more skyscrapers sending land values through the roof, that create dead neighborhoods of economic monoculture? Raise Fed rates even higher, thus further raising mortgages rates and VC borrowing costs? Have the Fed start selling off the trillions of dollars of MBS on its books, its voracious acquisition of which induced artificial demand for mortgage-creation among the lenders?
Just a few ideas, perhaps not all well thought out, on the spur of the moment. Similar additions to the list are welcome. Some are probably not realistic, but neither are massive office-to-rental conversions, massive office-to-biotech conversions, and outlawing homelessness and poverty. The RE cheerleaders here will surely laugh and scoff at most or all of them, because they see a different problem. Again, I appeal to Upton Sinclair.
i think commercial rents or at least subleases downtown are near 50% lower than 3 yrs ago. not sure about residential
This. Remember everybody Mission Bay was supposed to be built out as a biotech hub until Ed Lee and Co. saw all the dollars from elsewhere (e.g. Warriors). The biotech ship has sailed.
As to taxes, San Francisco has by far the highest business taxes of any Bay Area city. Oakland is second with just half the business taxes of SF,
From the SFBT.
” A tech or information company with 250 employees and $750 million in taxable gross receipts would face total business taxes in San Francisco of more than $10.4 million annually, according to the study. That same company would pay more than $4 million in taxes in Oakland, $17,000 in San Jose and $3,600 in Sunnyvale.”
Cool project. Who owns the building nowadays?
What is the cost psf of the conversion to residential?
100 Van Ness is a successful office high rise to residential high rise conversion.
That’s correct! But as we first outlined a year ago, the cost basis of 100 Van Ness was under $200 per existing square foot back in 2008, including the adjacent building at 150 Van Ness which was then demolished to yield a “bonus” 429 units of housing. And that’s why it was successful, an outlier, based on current building values, and actually made (economic) sense.
Market and 6th is where tenderloin meets mid-market meets soma. Build a police sub-station into the ground floor, and stabilize the property. Spotify bailed as office tenant because of employee safety concerns.
Didn’t the area used to have a sub-station? Perhaps we need a few more of ‘Panhandle pro’s property tax bonanzas to reopen it.
Love the hibernia bank building. What did police use for holding cells, the vault?
Used to live right beside it. The police would handcuff people to the cast iron fence. Be 30-40 perps chained there nightly before the paddy wagon would come take them to the jail at 6 am.