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The project that hauled in San Francisco's largest office lease so far this year now has approvals.
The San Francisco Planning Commission awarded Alexandria Real Estate Equities and TMG Partners full approvals on Thursday for their 1.2M SF mixed-use development within the city's newly rezoned Central SoMa area. In March, Pinterest signed a lease for 490K SF of the then-unapproved project in a deal illustrating the red-hot demand for office space in the city.
Currently the location of the San Francisco Tennis Club, 88 Bluxome St. is now being readied for approximately 775K SF of office, up to 118 affordable housing units and 134K SF of new space for the tennis club. Developers expect construction on Phase 1, which includes the 775K SF of office and part of the affordable housing building, to begin in 2020, with the office space coming online in 2022.
The project taps into the dwindling office space allowed under San Francisco's Proposition M, a citywide cap on the amount of office space allowed to be approved every 12 months (starting each October). Before approval of the 88 Bluxome St. project, the available allocation was at 2.1M SF, according to the San Francisco Business Times. With its full-project approval, the 88 Bluxome project brings that number down to about 1.3M SF of available office space.
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Alexandria Real Estate Equities anticipates other tech and also life science tenants joining Pinterest in the complex, which is already 60% pre-leased by Pinterest and the tennis club.
"88 Bluxome will bring an exceptional mix of much-needed community benefits and retail amenities to SoMa while it provides a dynamic campus environment to spur innovation," said Senior Vice President Terezia Nemeth, who heads real estate development and community relations for Alexandria.
"We have worked closely with the city of San Francisco and our community partners to effect a new model for urban development, one that supports the world's leading innovators, embraces excellence in sustainability and takes a holistic approach to engaging and activating the community."
The development will involve the ground-up construction of three buildings between 85 and 243 feet and a combined 17K SF of retail and restaurant space.
The major office development that beat 88 Bluxome St. to become the first to win approval in the newly upzoned Central SoMa area, Tishman Speyer's 598 Brannan St. development, did so on the first of two phases. Its second phase, which calls for 211K SF of the total 922K SF of office space, has yet to receive approval, with the city beginning to approve projects in phases to manage Prop M allocations.
Alexandria Real Estate Equities and TMG Partners' 88 Bluxome St. project is the first office development in the Central SoMa Plan area to receive full approval.
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