On February 1st, the ULI Young Leaders Group was treated to a first-class tour of three construction projects in the buzzing SOMA neighborhood of San Francisco. The tour included two renovations of historic structures at 631 Howard Street/55 Hawthorne Street and 140 New Montgomery, as well as the redevelopment of 680 Folsom Street.
631 Howard / 55 Hawthorne:
Sara Buss from DivcoWest, along with Tom Poggi and Dean McPadden from CAC, toured us through 631 Howard Street, which was purchased, along with 55 Hawthorne Street in November 2011. Since acquiring the building, Divco has done a full seismic retrofit of the approximately 236,000 sf structure, the difficulty of which was compounded by the fact that it was built in three phases – 1929, 1935, and 1948.
The showpiece portion of the property is the newly constructed, 35,000 sf “tri-level” space that includes 15,000 sf of basement, 12,000 sf of ground floor, and 8,000 sf of mezzanine space. In order to help drum up tenant interest, DivcoWest has built out approximately 90% on spec. The mezzanine – formerly walled-in storage space – has been opened up and wraps the ground floor space. In addition to its attractive brick & beam bones, the tri-level space also includes bike storage and showers in the basement.
Additionally, 20,000 sf of shell creative space is being built out on the fifth floor of 631 Howard, as well as the seventh floor of 55 Hawthorne. Both spaces feature sweeping views of SOMA. The 5th floor of 631 Howard and the 7th floor of 55 Hawthorne are scheduled for completion in late spring. All three spaces are expected to fetch rents in the low- to mid-$50s/sf, industrial gross (IG).
Built in 1964 and purchased by Boston Properties in August 2012 from a joint venture between TMG Partners and Rockwood Capital, 680 Folsom is in the midst of a complete redevelopment that includes stripping it back to its foundation, columns and slabs. Sean Donnelly of TMG Partners led the tour and outlined how, among other things, the developer is replacing the building’s concrete exterior with a glass curtain wall and adding two additional floors. In order to take advantage of its over-sized 34,000 sf floor plates, TMG relocated and rebuilt the building cores and upsized the building systems, helping it achieve LEED-Gold for core and shell.
In a unique move, the Owings Skidmore & Merrill-design will include three different curtain wall finishes, which allowed TMG to add “bump outs” to each of the floors, effectively creating additional rentable square footage and nine building corners, rather than the traditional four.
Donnelly commented the single biggest difficulty in the project was procuring and installing the backlit stone to be used in the state-of-the-art Mitsubishi elevator cabs, which required multiple trips to China and a slew of logistical headaches. Major renovations are expected to be complete by December 2013, followed by Riverbed Technology Inc. taking occupancy of floors 2-7 (200,000 sf on a 10-year lease), and Macys.com taking floors 8-14 (240,000 sf on a 15-year lease). The 15th floor will house mechanical equipment and an employee deck.
140 New Montgomery:
An icon of the San Francisco skyline since 1925, the old Pacific Telephone & Telegraph Building at 140 New Montgomery is getting a contemporary makeover, thanks to a joint venture between Stockbridge Capital Group and Wilson Meany. Josh Callahan, the Project Manager for Wilson Meany, explained how the 300,000 sf property was in disrepair when they purchased the building in 2007. As a result, the 12,800 sf floor plates, which step back to approximately 8,000 sf at the top of its 26-stories, were gutted to make way for a complete seismic upgrade and new building systems. The historic lobby and building façade have been restored, and bike rooms, showers, and lockers have been added in the basement. A large outdoor patio in back of the building, which is currently being used as a staging area for construction, will eventually serve as a tenant amenity and outdoor seating for the two restaurants, Aziza and Whiteside Company, which will set up shop on the ground floor. This area will also serve as an “art connection” to the adjacent SFMOMA.
At present, 140 New Montgomery is 60% pre-leased to Yelp, G2 Insurance Services and Knoll, with major core and shell renovations expected to be complete by September 1st; Yelp and the other signed tenants will occupy by October. The remaining ten floors are expected to lease for high-$50s to high $60s/sf.
Special thanks to all of our tour guides for their time and insight, as well as (insert names here) for organizing this fantastic tour!
Authored by: Zach Anderson, Colliers International