Bloomingdale's Will Change the Face of Commercial Real Estate in San Francisco
Feb 06, 2006
By the end of the year, the long-awaited Bloomingdale’s will open, making the combined Nordstrom and Bloomingdale’s center one of the largest urban mixed-use development projects in the country. With its blend of retail and office, this center will potentially have the same impact on San Francisco real estate that the development of the Spear and Stuart Street corridor development in the early 1980s had on the downtown financial district.
The impact will affect retail traffic patterns, office space demand, and new office space and residential development. The center will centralize commercial activity on mid-Market Street, restoring Market Street to a vitality that has not been seen since the 1950s. With its many restaurants, new retail shops, and theaters, plus planned housing development, once again people will come to mid-Market Street rather than traveling outside the city boundaries to malls for enjoyment and leisure activities.
For retailers, the new central point will be mid-Market and Union Square heading south. Retail to the north and east of Union Square will suffer, as will the office market to the north of California Street. It will be harder for these retailers to compete with the centralization of retailers and restaurants that will grab the attention of shoppers. Fourth Street, Stockton Street, and Powell Street will see increased traffic activity, and therefore will see upgrades in retailers as well as higher rental rates.
The interest in the office market closer to mid-Market will affect buildings that fall too far away from BART for commuters or that lack services to attract tenants. The office markets north and east of California on upper Montgomery and Sansome streets will struggle, while the office markets off New Montgomery, Mission, 3rd, and 4th streets will see renewed demand.
Starboard TCN Worldwide recently announced its move to 33 New Montgomery Street, which will occur in March. We chose this location because we believe it will serve as the new central office for the north and south financial districts as well as the South of Market, Yerba Buena, and the Civic Center office markets. With most of our competition in the north financial district, Starboard is best positioned to serve its broad base of owners and tenants from this new location. Not long ago, 33 New Montgomery was considered off the financial district corridor.
For retailers facing a lease renewal or wanting a new location, understanding these new traffic patterns is critical to long-term success. For office tenants, the advantages that will be offered in terms of services and leisure activities located in the new mid-Market area will be an incentive for employee attraction as well as employee retention.
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Written by: Hans Hansson
Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 21 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email firstname.lastname@example.org or call him at (415) 765-6897. You may also check out his website, http://www.commercialspacefinder.com/.