It’s the clearest sign yet that San Francisco is betting on the future of Mid-Market: City officials are targeting the struggling downtown neighborhood for the city’s largest lease deal in the post-pandemic era.
Multiple city departments already occupy over 400,000 square feet inside of 1455 Market St., a 22-story office tower once rented to Uber during the last tech boom. The plan is to expand that in the tower by 502,000 square feet, growing the city government’s footprint in the building to a total of roughly 930,000 square feet. As part of the transaction with property owner Hudson Pacific Properties, rather than an increase according to a previously negotiated schedule, the city’s rent for its expanded space in the tower will reset to $40 per square foot. That values the entire lease at over $1 billion over its life. The rent reset and a “modified escalation structure” is expected to save the city about $56 million, according to the city’s Budget and Legislative Analyst.
The deal also means that the city is not planning to act on its right to purchase by the end of 2027, per its prior contract. Though it could have more chances to acquire the tower in the future…