Everything You Need to Know About the Central SoMa Plan
The Central SoMa plan could more than double office space in one of the last areas of significant size in S.F., according to JLL research director Amber Schiada and managing director Matt Shewey (snapped in the 12th floor conference room of One Front St. this week).
The duo recently released a report analyzing the plan, which reveals that if Central SoMa is rezoned and redeveloped with the plan on the table for approval next year, it could mean 9.39M SF of commercial space and 46,960 in new jobs in the years to come.
While those numbers are available from the city, the JLL report pulls them together in a way that shows why the plan is important—without it, an estimated 5.56M SF of commercial space and 27,820 jobs may have nowhere to land. The rezoning would allow taller buildings and more office space, encouraging higher density around transit and leading to more office, commercial and residential space.
The eastern part of SoMa has developed over time, and it's a natural progression for that to move into central SoMa, Amber tells us. With the subway right there, it's the perfect area for dense development of office and residential, she says.
Matt calls the Central SoMa plan a "much needed relief valve," offering up more office space to companies that are itching to grow while giving workers an easy way to get to the office using Caltrain, BART or walking from a nearby residence.
Central SoMa would reap the same benefits as Mid-Market, where a focus on live/work/play built around transportation has boosted that submarket, Matt tells us.
The JLL report notes that the Bay Area should add 1.1 million jobs in the next 30 years, with most of that growth in S.F.
JLL's Q3 report shows S.F.'s office market is tight, with 8.4% in overall office vacancies. The only major market with a lower rate is Salt Lake City at 6.9%. And our average rents of $66.80/SF are second only to New York City ($70.64/SF). The same Q3 numbers show S.F. ranked 10th among major markets for new construction planned at 3.1M SF. The city is well behind cities such as New York (14.6M), Houston (10.8M), Dallas (7.7M) and Washington, DC (6.15M).
That tight market is a challenge as companies—particularly tech—look for places to expand. Fully entitled office space under construction in Central SoMa is already 74.6% pre-leased, JLL reports.
S.F. needs more office supply to keep rents from continuing to skyrocket. Developing the Central SoMa plan could create more stable rent increases as opposed to the double-digit rent growth seen in the last four years, Amber says.
The plan also puts a priority on affordable housing, which is key to creating the kind of community the project needs, Matt notes. With all of it comes the infrastructure, from wider bike lanes to more open space, to provide the work environment employers want. These employers want to stay in S.F., but have to see how they can grow in the next five to 10 years, he says.
JLL did the video above to give a taste of what Central SoMa could offer.
This is all great except for the limits of Prop M, the 1986 cap on office development. There's 1.4M SF left for allotment under the cap, with another 875k SF to be added by the end of this month. Central SOMA has 5.9M SF waiting for allotment.
With a vote to remove Prop M unlikely, the city is expected to look at ways to work around it, such as adding back in square footage for office that was converted to residential.
Amber says to expect more city discussions on Prop M next spring.