[Pedestrian]

As Boston Properties closes purchase of S.F. site, it braces for lower rents here
By Daniel J. Sernovitz – Senior Staff Reporter, Washington Business Journal
Jul 29, 2020, 2:31pm PDT Updated 8 hours ago

Boston Properties . . . . announced it has closed on its purchase of a 2.3-acre development site at Fourth and Harrison streets in San Francisco's Central SoMa district for $140 million, or $174 a developable square foot. The first phase of the mixed-use project, 725 Harrison St., is fully entitled for 505,000 square feet. Plans call for a 14-story tower, which has already received allocation from San Francisco's Prop. M office cap.

Company executives reiterated comments they made in April that they will not begin the project speculatively, or without tenants.

“Before the pandemic, we were going to proceed with the project,” Thomas said. “With the pandemic, we've put the project on pause to wait to see what market conditions are going to be.”

Executives said they are talking to tenants about full and partial leases, though they said they would not describe those discussions as "robust."

When asked by an analyst about how a glut of sublease space is affecting rents in San Francisco, President Doug Linde responded: "It's not affecting the market yet because there's nobody out in the market looking for space. It will affect the markets and rents will be lower” . . . .

https://www.bizjournals.com/sanfranc...Vvb0UifQ%3D%3D