SoMa's Ever-Changing Landscape
S.F. has officially landed on the international A List, but with that amazing growth comes responsibility, according to developers, brokers and stakeholders at Bisnow's Future of SoMa event this week at the Intercontinental. Architectural Dimensions prez James Heilbronner moderated, pointing out the Bay Area will see a 58% growth in construction jobs by 2040, by which time 190,000 additional jobs will be needed in S.F. (And with that an entire ocean of coffee.)
Panoramic Interests owner Patrick Kennedy says SoMa is a real estate mishmash, from high-rises to high-end retailers and everything in between (an incoming macaron shop, for one, he informed us on the phone last week). Its final form is yet to be seen, and that's what makes the area fascinating. Because there are so many smaller properties in the 1,200 SF range, that opens up more opportunities to local enterprises and small biz to move in (Hayes Valley is another example of that). The exponential popularity of Uber and Lyft is changing the nature of buildings, with more going the carless route. He's a fan of that mentality; he'd always rather build apartments than parking spaces.
TMG Partners CIO Matt Field says demand for parking at his redeveloped 680 Folsom project was pretty low (he's not surprised, however; he'd much rather Uber from point A to B in S.F. than deal with a parking headache). Matt's got deep SoMa roots, having built the Bed Bath & Beyond center back in '88 when that area was a wasteland. (Google "SoMa 1985" images to see what he means.) Now we're truly a world-class city on everyone's A list, he says. Look at the international "Starchitects" wanting to have their hands in Transbay towers. It's our job to manage that growth, he tells the room. He asked who voted on Tuesday (a sad sprinkling of hands went up). Too few people are voting, he scolds, and we aren't going to solve problems without some change.
Aging infrastructure throughout the city is a serious issue. But upgrading sewer systems (ours dates back to the mid-1800s, back when the sewers were also places to throw your garbage from out of your window), freeways and highways is typically not a sexy topic politicians go after, says Transbay Joint Powers Authority exec director Maria Ayerdi-Kaplan. We need to get engaged to make the federal government address it. Now is a prime time to invest in S.F.—not to mention a fabulous time to be a seller, she says. Fundraising for Transbay Transit Center is a "herculean effort" and $2B is needed for Phase 2. It's going to take the help of all the developers in the SoMa area to get there, and she urges the room to push local elected officials to get that train into Transbay. There is such little funding at the nationwide level, so the private sectors need to step up and be involved.
SRS Real Estate Partners EVP and managing principal Matt Alexander is charged with leasing out the future 250k SF Market Street Place retail center. Construction starts in September for a delivery two years later. SRS' office opened at Howard and Beale 15 years ago, and since then SoMa's evolved into distinct, hot neighborhoods (his landlord wants to double rent, so SRS will move somewhere else in SoMa). He spewed off a couple projects in the works, including the Honda and Goodwill sites going residential (we broke those stories). T.J. Maxx and OfficeMax on Harrison may be re-tenanted, he notes. He's helping Walgreens find space in SoMa, but he's finding many owners are after chef-driven concepts in their properties.