SF Giftcenter Converting to Creative Office

SAN FRANCISCO-Much of the 388,000-square-foot San Francisco Giftcenter and Jewelrymart is being converted to office space, while the ground floor will be converted to retail space. The property has heretofore primarily housed tenants who design and manufacture gifts, clothing and jewelry for retailers and interior designers. The owner, ScanlanKemperBard Co., a Portland, OR-based private equity firm better known as SKB, paid $94 million for the three-building property in mid-2007.

SKB principal Todd Gooding tells GlobeSt.com the space being converted is the Giftcenter space, which was 30% vacant when the company acquired it and is more vacant now as the company more recently began letting leases expire in anticipation of the repositioning. The Jewelrymart portion of the development, which will receive only common-area improvements as part of the repositioning, was very well leased up at the time of acquisition—at rates in the $50s per square foot, according to local sources–and remains well leased today.

“The plan is to take advantage of the architectural characteristics of the historic structure by building out creative office space,” space that will lease at a higher rate than former Giftcenter tenants. Those tenants were paying a rate in the low $20s per square foot on a full-service basis, according to local industry sources. Gooding says he currently has proposals out to tenants in the high $20s per square foot on a full-service basis.