Despite record vacancies, Presidio Bay Ventures still wants to build two side-by-side office buildings in San Francisco.
The locally based developer led by Cyrus Sanandaji has requested a three-year extension to construct two five-story office buildings at 130 Townsend Street and 50 Stanford Street, in South of Market, SFYimby reported.
Presidio Bay bought the site in July 2019 for $24 million. The office project, dubbed Ampersand, was approved in 2021, but then stalled because of “current market conditions,” a representative of the developer said.
Then Sanandaji placed a $91 million bet on Downtown San Francisco, dubbed early last year as “the most empty downtown in America.” Office availability has since risen to 38.7 percent, including subleases, according to CBRE, with vacancy at a record 36.6 percent.
The founder of Presidio Bay bought an 11-story, 56-year-old office building at 60 Spear Street in the south Financial District for $40.9 million — 62 percent less than it traded for a decade earlier. He plans to pour in another $50 million to fix it up.
He wants to turn it into “the country’s first office resort” — including a 7,700-square-foot rooftop bar and restaurant, sauna rooms, cold and warm water plunges, saltwater floating pools, public coworking areas and a café bakery, among other perks.
Now his Presidio Bay wants to revive plans to build 83,700 square feet of offices about two blocks from South Beach Harbor.
Plans call for an adaptive reuse and addition of a historic brick building, and a new building on a parking lot next door.
Presidio Bay wants to top a century-old, one-story building once known as the Inglenook Vineyard Agency with a four-story addition. The project would result in a five-story, 36,500-square-foot office building at 130 Townsend, with ground-floor shops and restaurants.
The project, designed by locally based Stanton Architecture, would wrap the modern addition with terracotta louvers.
The developer also wants to replace a parking lot with a five-story, 47,200-square-foot office building at 50 Stanford.
The bottom two floors would have a “faux historic facade” of glazed terracotta and metal panels, with the top three floors with metal panels similar to the building next door.
The 65-foot-tall buildings would have parking for 57 bicycles, but no cars. The half-acre parcel is a block from Oracle Park, a block from the historic South Park and two blocks from the San Francisco Caltrain Station, according to SFYimby.
Sanandaji calls his proposed premium offices “flight to experience” — a riff on “flight to quality” that has helped fill the city’s trophy office buildings during a broad shift to remote work. A timeline for development was not disclosed.
“The current dynamics in the office market reinforces our thesis that there is a significant flight to ‘experience’ unfolding, resulting in a ~12 percent vacancy rate for trophy, new construction and premium assets, while the overall market approaches a 40 percent vacancy rate,” Sanandaji told SFYimby in a statement.
He said Ampersand was “designed and entitled as a differentiated office campus poised to meet this heightened tenant demand upon completion.”
— Dana Bartholomew
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