Starwood Capital has signed a 10-year lease for just under 11,000 square feet on the 32nd floor of One Sansome, The Real Deal has learned.
The real estate investment trust management firm will leave behind its former San Francisco offices at 100 Pine Street in late summer, according to Michael Barker, whose Barker Pacific Group owns One Sansome along with Prudential Real Estate Investors. Financial terms of the lease were not disclosed.
“We’re in final design,” said Barker. “We’re building out some very, very nice space for them. This is space that’s unoccupied that we’re totally remodeling for their specific needs.”
Barker said the global real estate investor was drawn to the building’s location on top of the Montgomery BART station, as well as its newly revamped amenities package, which includes a $20 million investment in its ground-floor space. That renovation involved turning a portion of the former lobby into flexible conference rooms that tenants in the buildings can rent out free of charge. Starwood loved having the option of using those spaces, as it meant the firm could have less square footage in its office but still have spots for larger meetings when necessary, Barker said.
The short-term leases that have become popular in San Francisco as office tenants remain uncertain about the future of remote work policies while vacancy rates trend higher and higher, have not been a big factor in the deals signed at One Sansome in the last year, Barker said.
“Some of these companies want to have a long-term home,” he said, pointing to other recent long-term leases. They include commercial real estate investor Ellis Partners; brokerage Newmark, which took the top two floors and also represents the building; and an expansion and extension from current tenant HIG Capital.
None of those recent deals include tech companies, he pointed out.
“Tech guys, I think that’s where you’re hearing a lot of this short-term stuff,” he said.
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One Sansome is diversifying into the wedding industry, Barker said, hosting hundreds of wedding planners in one of its first events at its newly renovated and weatherized Conservatory space, a columned granite and glass atrium first built in 1910 to be the home of Anglo and London Paris National Bank. The 16,000-square-foot space can accommodate up to 2,000 people and — thanks to new windows, heating and cooling systems, as well as a deal worked out over several years with the city to enclose the privately-owned public open space and have it off limits to the public during certain days and hours — is now available for private events. Several weddings have already been booked, he added.
“We’re spending a lot of money on this,” Barker said of the new ground-floor amenities, including a high-end British club-style restaurant set to open this summer. “And we think it’ll pay off in the long run.”