Related California has moved forward with plans to build a 41-story trophy office and hotel building in San Francisco.
The Irvine-based developer avoided negative comment in an environmental review for the proposed office-hotel tower at 530 Sansome Street, in the North Financial District across from the Transamerica Pyramid near Jackson Square, the San Francisco Business Times reported.
The $600 million project is on track for Planning Commission approval in July and a potential Board of Supervisors vote in September.
Plans call for a 544-foot tower with 360,000 square feet of offices atop a five-star, 200-room hotel, plus a new firehouse at 447 Battery Street to replace a station swallowed up by the project.
A previous 19-story hotel and fitness club project, approved in 2021, stalled.
If approved, Related would break ground late next year or early 2027 and finish by 2030.
The tower would be the first in the North Financial District since 2018, and the city’s first new luxury hotel since the St. Regis opened in 2005.
Having offices would run counter to market conditions in San Francisco, where nearly two out of five city workplaces sit empty.
Nicholas Vanderboom, COO for Related California, told the Business Times the city still has a steep recovery, but said he sees positive momentum and an “incredible concentration of talent and businesses with demand for new space.”
The answer lies in trophy offices.
In New York, locally based Related Companies struck a deal with Deloitte last month to occupy 800,000 square feet of a skyscraper yet to break ground in Hudson Yards,a sign of ongoing demand in the top end of that market.
Related sees similar trends in San Francisco. While overall office vacancy is 35.8 percent, among the highest in the nation, the rate drops to 7 percent for offices with premium views. Rents for such trophies average $139.50 per square foot, more than double the citywide average, according to the Business Times.
Having now cleared the public comment phase, Related plans to ramp up chats with prospective tenants for 530 Sansome.
One estimate suggests the tower could capture up to 500,000 square feet of future demand as leases expire and appetite for top-tier offices grows. The target includes professional services firms seeking 40,000 to 50,000 square feet in premium offices, some with cubicles in Hudson Yards.— Dana Bartholomew
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