The Warfield Building is not the Warfield Theatre, though it’s right next door. And the Warfield Building is also unlikely to become downtown’s first office-to-housing conversion anytime soon, as the building just sold to a new owner who will instead make it an arts and media facility.
Sixth and Market Street’s Warfield Building, which is not the Warfield Theatre, but the larger building that towers over it, was set to become downtown San Francisco’s first office-to-housing conversion. We all figured this would set off a major chain of similar conversions as the office markets languished, though the Warfield Building’s conversion would have only resulted in somewhere between 40 and 50 units.
But it’s not a secret that Sixth Street is a pretty blighted area these days, which is one problem. And there was an even larger problem with the project, as the Warfield Building’s owner Group I was served with a default notice from its lender in March of last year.
And now the conversion may go up in smoke entirely, as the building just sold to a new owner for $7.3 million in a deal that closed Friday. The Chronicle reports that the buyer is the Community Arts Stabilization Trust (CAST), who are not prioritizing the office-to-housing conversion plans.
Instead, the building will serve as some sort of “media and arts hub” and its anchor tenant will be indie public radio station KALW, who will take up two of the building’s nine floors. And going forward, it will not be known as the Warfield Building, but instead as “Warfield Commons.”
But CAST tells SFist that the housing conversion could happen at some point down the road.
"CAST is not abandoning the conversion plans outright. Housing remains a possibility, but for the immediate future, we’re focused on bringing the Warfield back to life as a place for collaboration, production, and creative operations," a CAST representative tells SFist. "For every prospective space CAST looks at, we consider if the site can be an opportunity for artist housing because anchoring the arts and housing is a critical part of the future of Mid-Market and San Francisco."
The office market downturn has been something of a boon to KALW. Traditionally located at Burton High School in Visitacion Valley, KALW moved its studios downtown in 2023 into one of those vacant-to-vibrant pop-ups. And now they’re an anchor tenant in a downtown office building.
“I think it’s important that the future of downtown San Francisco is built upon organizations that are committed to the city and committed to the area. We’ve been around since 1941,” KALW executive director James Kass said in a statement to the Chronicle. “All of the organizations that will be in the building are truly committed, and we are not going to leave because economic headwinds change.”
CAST will also be moving into the 48,300-square-foot building, and per the Chronicle, that organization is “in conversation with a number of media and literature organizations about leasing space” there.
“These are the buildings that nonprofits lose out on for lack of finances, ready tenants or complicated partnerships,” CAST CEO Ken Ikeda told the Chron. “We’ve experienced first-hand rejection, even with proof of funds, because nonprofits are seen as unsustainable. This simply isn’t true. KALW is 83 years old and has never been stronger.”
But this sale serves as a reminder of why we’re not seeing many office-to-housing conversions. Even in this economy, it is much more affordable to simply sell the building.
The previous owner Group I’s president and CEO told the Chronicle, “I was waiting for the equity market to come back. And I’m at a point where the value has plummeted and I have to exit to pay my lender.”
Group I bought the building in 2011, and once it hit full occupancy in 2017, it was home to tenants like Match.com and Spotify.
But it’s certainly ironic what has become of the area rewarded with the so-called “Twitter tax break” in 2011. Mid-Market certainly boomed with office tenants, but the blight issues never went away, and may be worse since the pandemic. Now that stretch of town has an estimated office vacancy of nearly 50%, and owners seem to be leasing to modestly funded nonprofits instead of the VC-backed tech companies of old.
Note: This post has been updated with comment from the Community Arts Stabilization Trust (CAST).
Image: Google Street View
