A new office tower, which would be the first to be built in the Financial District since 2018 and would include the first five-star hotel to be constructed in the city in three decades, is moving along at 530 Sansome Street, with a developer who's bullish about downtown's future.
We first learned about this 41-story project from Related California last summer, and it's slated to rise on the site of a the San Francisco Fire Department's Fire Station 13 at 530 Sansome — with a replacement firehouse planned on the opposite side of the block, at 447 Battery Street. The elongated glass and steel tower, designed by Skidmore Owings and Merrill, include 24 stories of "bespoke" Class A office space in the top of the tower, and a planned 15-story, five-star hotel below it, with two floors of amenities in between. It would extend almost the length of the block of Washington Street between Sansome and Battery, and rise 544 feet, one block east of the Transamerica Pyramid.
Now, as the Chronicle reports, the building's environmental impact report (EIR) comes out today, we have a few new renderings, and if the project gets its permits later this year, Related is hoping start construction by late 2026.
Matt Witte, a principal at Related California, tells the paper, "[It's] the right building in the right location at the right time."
The office market remains in the dumps in downtown San Francisco, with a historic 37% vacancy rate. But Witte previously told the Chronicle last summer that the office component of the project was geared toward "very specific types of tenants that historically have been interested in smaller floor plates with views."
Related California President Gino Canori echoes Witte's thoughts, telling the Chronicle, "This started out as a contrarian bet, but as we dug in deeper and looked at the market, how it is evolving and maturing out of COVID, it doesn’t seem so contrarian any more. It’s a story about San Francisco’s recovery, about the city coming out of a tough time and building something everyone can be proud of."
This was originally a pet project of former District 3 Supervisor Aaron Peskin, who began seeking out a developer to acquire the fire station site — and build a replacement — in 2017. Related California was selected, but the entitlements for the project didn't come until 2020, and then the pandemic hit.
But Related California is now making the same bet as New York developer Michael Shvo, who took on the renovation of the Transamerica Pyramid mid-pandemic and has since reopened it. Both developers seem to agree that seekers of prime, Class A office space are still there and looking around downtown, and those businesses will be part of downtown San Francisco's eventual full recovery, slow as it may be.
The Chronicle notes that even though we often hear about that 37% office vacancy rate, when you look at the top-tier buildings and office floors with views, the vacancy rate drops to 6.9%. And brokers say that lease rates for those top-tier buildings are as high if not higher than they were in 2019.
The city is also getting something out of this deal beside the fancy new firehouse (also designed by SOM) — Related is pledging $4.5 million toward an affordable housing project in Chinatown, at 774 Pacific Street.
Previously: Major Developer Gambles on Downtown SF, Proposes 41-Story Office/Hotel Tower on Fire Station Site
