"The city does not publish a list of pending developments," says JLL's San Francisco managing director Chris Roeder. "We did some research ourselves to try to sort it out and see how the future development is affected by Proposition M."
Established in 1986 to control economic growth and development, Prop M caps the amount of high-rise office development that can be approved for development at 875,000 sf per development year, which runs October through September. That means it would take eight years for all of the un-entitled projects in the development pipeline to be approved for development.
"For probably only the second time since Prop M was passed we are going to be in a position where developers aren't going to be able to develop as much square footage as they would probably like to," Roeder tells GlobeSt.com. "The limited amount of future development increases the value of entitled and un-entitled land. Coupled with high construction costs, I don't think we will see any great deals in the next three to five years."
The 2.4 million sf under construction is divided among six projects. Two of those projects--Foundry Square I by Wilson Meany (400 Howard St.; 335,000 sf; 10 stories) and the new Federal Building (1000 Mission; 600,000 sf; 18 stories)--have no availability. A third project, Shorenstein's 409-411 Illinois St. (five stories; 450,000 sf), is 50% preleased.
No preleasing has been announced for the other three projects that are under construction. The projects are 555 Mission St. (559,000 sf; 33 stories), which is being developed by Tishman Speyer and Morgan Stanley; 500 Terry Francois Blvd. (258,538 sf; six stories), being developed by Lowe Enterprises; and the 185 Berry St. addition (175,000 sf; two new floors), which is being developed by Rreef.
All of the projects under construction are scheduled for delivery in 2008 except the federal building, which was recently completed. None of the projects under construction is trying for LEED certification from the US Green Building Council, according to JLL.
The project entitled but not yet under construction include 330 Bush St. by Shorenstein (350,000 sf; height TBD); Foundry Square III by Wilson Meany (505 Howard; 220,000 sf; 10 stories); 524 Howard St. by Higgins Development and the Pritzker family (275,000; 23 stories); and 44 Fourth St. by Jamestown Properties (110,000 sf; height TBD).
The largest of the projects currently seeking entitlements are 222 Second St., a 617,000-sf project for which Tishman Speyer is seeking LEED certification; 40-90 First St., a 520,000-sf development by Solit Interest Group; Piers 27-31, a project by Shorenstein and Farallon that tentatively includes 440,000 sf of office; 1401 Third St., a 420,000-sf project by Catellus; and 535 Mission St., a 293,750-sf project by Beacon Capital Partners for which LEED certification is being sought.
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