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Developer Undaunted by Harsh Market

SAN FRANCISCO-After overcoming a slew of legal and development challenges, developers of the 1.4-million-sf Bloomingdale's project are ready to go, despite the gloomy market that it will break ground in.

By Michelle Savage | Updated on October 13, 2002

SAN FRANCISCO-The developers of San Francisco’s massive Bloomingdale’s project have finally overcome a variety of legal and development challenges that have delayed the project for years, but now find themselves faced with the challenge of filling 220,000-sf of office space and 125,000 sf of retail space in an inhospitable commercial real estate market.

When the project was first proposed in 1996, building a 1.4 million sf project seemed like a good idea. San Francisco was booming and office and retail rents were at an all-time high peaking at around $80 per sf. However, the latest market reports reveal that there is approximately 15 million sf of vacant office space in the city and the $80 rental rates have dropped into the $30s. Even the retail sector has taken a big it, with rental rates dropping about 30%.

Developer Forest City Development California Inc. remains undaunted. The company plans to go through with the massive project despite the market’s instability, which is to say they are confident that the market will bounce back in the next few years.

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