Pending Office Developments Have Hit The Proposition M Wall

There is no doubt that San Francisco is under a development renaissance.  Rising skyscrapers in the city’s Transbay District, a growing city backlog for thousands of new homes and additional office space, and efforts to raise height limits near the Civic Center indicate that the economy is ascending towards another peak.  Both city planners and developers are increasingly engaged in symbiotic projects that allow larger and taller buildings in exchange for more affordable housing, money for city programs, and public initiatives such as the new Transbay Terminal, Mexican Museum, and Flower Mart.  The real estate party might be over soon though, at least when it concerns large office buildings, for a party crasher is lurking in the wings, a crasher known as Proposition M.

Each new approved office high-rise, including the notable Salesforce Tower and 250 Howard, must siphon from a pool of granted office space under the city’s Proposition M law.  Though the 2008 recession suppressed construction starts and allowed a replenishment to the reservoir, a surge of new commercial activity within the last five years has nearly drained the pool for big office projects.  As of February 2016, the available cache is too inadequate to sate the appetite for all pending projects nearing their approval denouement.  Such unallocated projects, which include 50 First Street and 598 Brannan, would bring the pool into the red at -719,423 sq. feet if their office space was approved.  Unless a new policy is implemented or new ballot measure is brought before voters soon, big office projects will be delayed or potentially cancelled if the economy plunges into another growth decline.

Notable Unallocated “Pending” Projects

The following is a list of noteworthy “pending” projects, those nearing the end of the city approval process, which still need to be granted office space:

50 First Street – 1,050,000 sf
598 Brannan Street – 700,456 sf

Notable Unallocated “Pre-Application” Projects

The following is a list of important “pre-application projects”, those earlier in the planning phases, which will still need to be granted office space:

725 Harrison (Harrison gardens) – 907,300 sf
Pier 70 – 1,810,000 sf
Mission Rock – 1,300,000 sf
Flower Mart Project – 1,512,260 sf

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