{"id":32588,"date":"2024-04-01T17:42:21","date_gmt":"2024-04-02T00:42:21","guid":{"rendered":"https:\/\/occupysf.net\/?p=32588"},"modified":"2024-04-01T17:42:21","modified_gmt":"2024-04-02T00:42:21","slug":"from-poolside-to-deskside-sf-developer-bets-on-office-resort-to-bring-workers-back","status":"publish","type":"post","link":"https:\/\/occupysf.net\/index.php\/2024\/04\/01\/from-poolside-to-deskside-sf-developer-bets-on-office-resort-to-bring-workers-back\/","title":{"rendered":"From poolside to deskside: SF developer bets on \u2018office resort\u2019 to bring workers back"},"content":{"rendered":"\n

A largely vacant office building in the Financial District is the next planned site for an eat-work-play concept pioneered in Menlo Park<\/p>\n\n\n\n

\"An
An atmosphere associated with a relaxing vacation might be the key to getting more people working in-person. | Source:AI illustration by Clark Miller for The Standard<\/figcaption><\/figure>\n\n\n\n

By\u00a0Kevin V. Nguyen<\/a>Published\u00a0Mar. 31, 2024 \u2022 sfstandard.com<\/p>\n\n\n\n

Imagine a place where the office space is fully leased, apartments are packed, and residents and workers are lining up in front of beloved neighborhood institutions like Che Fico, Barebottle Brewing, Burma Love or Andytown Coffee Roasters. <\/p>\n\n\n\n

It sounds like a pre-pandemic memory of San Francisco, but this scene is actually playing out in Menlo Park, where a developer thinks it has just what the beleaguered Financial District needs to recapture its mojo. <\/p>\n\n\n\n

Completed last year by San Francisco developer Presidio Bay Ventures, the 760,000-square-foot project called Springline was meant to create a feeling of being in a large resort, without being at an actual resort, according to Presidio Bay Managing Director Cyrus Sanandaji.<\/p>\n\n\n\n

The so-far successful bet is that an atmosphere associated with a relaxing vacation might be the key to getting more people working in person. In addition to two office buildings and 183 apartments, the complex includes a fitness center, a private spa, a golf simulator and a public outdoor gathering space.  <\/p>\n\n\n\n

\"Left:
At a new, mixed-use development in Menlo Park called Springline, popular San Francisco businesses like Barebottle Brew Company, left, and Che Fico, right, are the main attractions. | Source:Kevin Nguyen\/The Standard<\/figcaption><\/figure>\n\n\n\n

With a proof point on the Peninsula, Presidio Bay is now wagering on the same concept to turn around a nearly 60-year-old office tower in San Francisco\u2019s hollowed-out downtown. <\/p>\n\n\n\n

Presidio Bay wants to gut and renovate an 11-story office building it picked up at a steep discount last year, located on the corner of Spear and Mission streets. The largely vacant property was purchased for $40.9 million last summer, a price two-thirds less than its previously assessed value.  <\/p>\n\n\n\n

Sanandaji said the project, dubbed 88 Spear, is about repositioning the property to make it usable and relevant again in today\u2019s post-pandemic market, where commodity office space has fallen out of vogue. <\/p>\n\n\n\n

According to plans submitted to the city\u2019s Planning Department earlier this month, chief among the changes will be the construction of an entirely new floor at the top of the building housing an 8,000-square-foot rooftop restaurant and bar. <\/p>\n\n\n\n

\"Urban
Built in 1967, the 11-story office building at 88 Spear St. sold at a steep discount last year. San Francisco developer Presidio Bay Ventures submitted plans to transform the vacant tower into a new office-resort destination. | Source:Estefany Gonzalez\/The Standard<\/figcaption><\/figure>\n\n\n\n

Presidio Bay also hopes to renovate everything underneath, too, including adding a spa complete with sauna rooms and various swimming pools for floating and plunging; a coworking space; a cafe and bakery; and a full-service gym with room for physical therapy, acupuncture and personal training. <\/p>\n\n\n\n

\u201cFive-star hotels don\u2019t even have these perks,\u201d Sanandaji told The Standard. \u201cWhat\u2019s clear to us is that [real estate] is no longer just a flight to quality, but a flight to experience.\u201d<\/p>\n\n\n\n

Despite being years removed from the pandemic shutdowns, San Francisco is still in the early innings of a commercial real estate reset<\/a>, where office vacancies continue to climb and sales prices are falling. According to real estate firm Cushman & Wakefield, the city\u2019s overall vacancy rate has continued to break records, topping out at roughly 34% at the end of the first quarter.<\/p>\n\n\n\n

The term \u201cresort\u201d positioned alongside a productive workplace has drawn some eye rolls from some locals and competitors, but Sanandaji said the idea isn\u2019t to import Hawaii to San Francisco. Instead, it\u2019s about a focus on hospitality to differentiate Presidio Bay\u2019s offerings from the region\u2019s plentiful but increasingly empty office properties. <\/p>\n\n\n\n

\u201cYou know that sense of relief you get when you arrive at a holiday destination,\u201d he said, adding that 88 Spear will feature nautical theming to honor the history of Matson Navigation<\/a> constructing the building in 1967. \u201cWe want to capture that feeling and deliver it to people.\u201d <\/p>\n\n\n\n

\"A
With San Francisco grappling with record-high office vacancies since the pandemic, Presidio Bay Ventures is attempting to create an attractive environment to lure more people back downtown. | Source:Courtesy Brian Kitts Photography<\/figcaption><\/figure>\n\n\n\n

\u201cWe\u2019re not writing off the office,\u201d he added. \u201cIt just can\u2019t be the same way it\u2019s been.\u201d <\/p>\n\n\n\n

Presidio Bay isn\u2019t alone in betting on amenities to turn around tired office buildings. Less than a mile away, luxury developer Michael Shvo is taking a similar approach to rehabilitating the famed Transamerica Pyramid<\/a>. <\/p>\n\n\n\n

The data somewhat supports the theory. For \u201cTier 1\u201d buildings\u2014defined as trophy buildings with premium views and amenities\u2014the vacancy rate and average asking rents are night-and-day compared with the rest of San Francisco, according to Robert Sammons, senior director of research at Cushman & Wakefield.<\/p>\n\n\n\n

In his team\u2019s preliminary research, the vacancy rate for such buildings, generally located in the Financial District, was 7.4% last quarter. Meanwhile, the average asking rent of $105 per square foot is 40% higher than the rest of the city. The data does not factor in spaces available for sublease.<\/p>\n\n\n\n

\u201cThere remains a desire by tenants to occupy the best product possible,\u201d Sammons said. \u201cThe upscale amenities in top-tier buildings are certainly a differentiator, but something that wasn\u2019t really necessary in San Francisco pre-pandemic because the market had such a low vacancy rate and tenants were looking for space wherever they could find it.\u201d <\/p>\n\n\n\n

An all-inclusive experience<\/h2>\n\n\n\n

Lauren Crabbe, owner of Andytown Coffee Roasters, said she and her partners didn\u2019t think they were ready to expand outside of San Francisco before they were approached by Presidio Bay about coming to Springline. <\/p>\n\n\n\n

\u201cWe just didn\u2019t have the bandwidth to learn about another city\u2019s processes,\u201d Crabbe said. <\/p>\n\n\n\n

To convince Andytown and other well-known San Francisco businesses to open at the Menlo Park complex, Crabbe said Presidio Bay helped the owners navigate \u201ceverything permitting-wise\u201d so they could focus on honing their product and hiring new staff.  <\/p>\n\n\n\n

\u201cThey saw the value of having small local brands, and instead of just waiting and hoping for us to come, they got in and helped us get there,\u201d Crabbe said. <\/p>\n\n\n\n

\"A
Burma Love has been a hit in Menlo Park, just as it is in San Francisco. Owner Desmond Tan said his experience with Presidio Bay Ventures is a big reason why. | Source:Kevin Nguyen\/The Standard<\/figcaption><\/figure>\n\n\n\n

Desmond Tan, owner of Burma Love and Burma Superstar, said his relationship with Presidio Bay this past year has motivated him to challenge other eager brokers, who are also courting him to open additional locations, to bring more to the table in terms of favorable rent conditions, capital improvements and help with local officials. <\/p>\n\n\n\n

As for whether the resort model has anything to do with his restaurant\u2019s success at Springline, Tan said while it\u2019s hard to draw a definite conclusion, he felt having a concentrated vibrancy has undoubtedly had a positive knock-on effect. <\/p>\n\n\n\n

Sanandaji said he wants to establish a similar relationship with restaurant and bar operators at 88 Spear. <\/p>\n\n\n\n

\u201cWe view our relationship with them as long-term partnerships,\u201d he said, adding that the company prefers \u201chomegrown\u201d concepts rather than national chains. <\/p>\n\n\n\n

Sanandaji said Presidio Bay is aiming to start construction in the first quarter of 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"

A largely vacant office building in the Financial District is the next planned site for an eat-work-play concept pioneered in Menlo Park By\u00a0Kevin V. NguyenPublished\u00a0Mar. 31, 2024 \u2022 sfstandard.com Imagine a place where the office space is fully leased, apartments are packed, and residents and workers are lining up in… Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/32588"}],"collection":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/comments?post=32588"}],"version-history":[{"count":1,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/32588\/revisions"}],"predecessor-version":[{"id":32589,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/posts\/32588\/revisions\/32589"}],"wp:attachment":[{"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/media?parent=32588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/categories?post=32588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/occupysf.net\/index.php\/wp-json\/wp\/v2\/tags?post=32588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}