Despite problems at the Transbay Transit Center, private projects around the terminal are sprouting

July 31, 2017 • Source: • Posted in: Market News

With the Transbay Transit Center scheduled to finish construction by the end of the year, buildings are sprouting in downtown San Francisco around the hub like mushrooms after a rain storm.

Marquee developers such as HinesBoston Properties, John Buck Co., Golub & Co., Jay Paul and Related California are building or have finished massive housing or office projects. Billions of dollars of investment have poured in over the past five plus years.

The Salesforce Tower and 181 Fremont both recently “topped off” or finished external construction. The boom has garnered interest from around the world. Among the projects in the pipeline are two — Oceanwide Center and 555 Howard St.— funded at least in part with capital from mainland China and Hong Kong.

Many of the large sites surrounding the transit center are on public land that was sold to private developers to help pay for the transportation hub. That process was overseen by the city’s Office of Community Investment and Infrastructure (OCII).

OCII has sold 6.5 acres of public land for nine projects for a total of $722 million. Two more parcels, slated for affordable housing, Block 2 and Block 12, have yet to be sold.

Two projects have been completed on land sold by OCII — 25 Essex St. and 280 Beale St. Together they have 409 market-rate units, 190 below market-rate units and 12,592 square feet of retail.

Those under construction represent 833 market-rate housing units, 380 below-market rate units, 19,242 square feet of retail, and 2.1 million square feet of office space. That includes Block 8, 548 units from Related California and TNDC. Related is building 279 market-rate affordable units, 118 condos and 71 inclusionary affordable apartments. TNDC is underway on 80 rental units.

“Everyone is so busy,” said Nadia Sesay, the interim executive director of OCII.

Not included in those figures is a proposal to build on Parcel F, which sold for $160 million to Urban Pacific Development LLC and Hines, along with Goldman Sachs Group Inc.’s Broad Street Principal Investments LLC in 2016. After running into design concerns at the Planning Department, a revised proposal is expected to be submitted later this summer.

That same development team is under option on another Transbay parcel, Block 4, which could hold up to 600 units, approximately half of which could be affordable and half market-rate.

In total, 4,200 units of housing are planned, 35 percent of which will be subsidized so as to be affordable at below-market-rates.

One of the buildings under construction is a 120-apartment building at 255 Fremont, all the units of which will be reserved for those making between 40 and 50 percent of area median income. The project is being built by Mercy Housing and funded in part by a $10.3 million subsidy from the Golub, paid to meet city requirements for the approval of a separate, market-rate development.

“Things are really moving along,” said Sesay.

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