Alexandria Readying Sale of San Francisco Tennis Club

It’s almost game, set, match for Alexandria Real Estate Equities at the embattled San Francisco Tennis Club site.

Pasadena-based Alexandria plans to list the 2.6-acre property at 88 Bluxome Street in the first quarter of next year, the San Francisco Business Times reported, citing two sources familiar with the matter. An estimated asking price has not been disclosed.

Alexandria acquired the Bay Club’s San Francisco Tennis Club in 2017 for $130 million. The site is entitled for both a 1.1 million-square-foot commercial project and a 1,500-unit residential project, giving a potential buyer a choice between the entitlements. Neither option would include a replacement tennis club that Alexandria initially promised to build.

When Alexandria bought the location, the firm plotted renovating the building into a commercial project with 775,000 square feet of office space, a roughly 135,000-square-foot basement-level tennis club and additional commercial and retail space above ground.

In early 2019, Pinterest signed a 490,000-square-foot pre-lease to become the property’s anchor tenant, but it terminated the lease in August 2020 and opted to stay at its existing offices in South of Market. With that potential tenant out of the picture, the financial feasibility of the development became difficult to overcome, leading Alexandria to abandon the proposed replacement tennis club and explore selling the property.

Alexandria secured city approval for a version of the commercial project that did not include new tennis facilities in 2023, prompting a lawsuit from the San Franciscans for Sports and Recreation group that was settled for $7.5 million. Still, vertical construction never began.

In May, Strada Development Group proposed building 1,500 units across two towers at the SoMa site, becoming the first firm to take advantage of new regulations allowing large-scale development projects in Central SoMa to pivot from commercial to residential use. The entitlement calls for 785 residential units in one 599-foot tower and 715 units in a smaller 528-foot building, both complying with the San Francisco Planning Commission’s 600-foot height limit for new multifamily projects. Of the 1,500 units, 150 would be set aside for very-low-income residents. The San Francisco Planning Department approved the residential plan earlier this month, SF YIMBY reported.

— Chris Malone Méndez