By Jon Peterson[contextly_sidebar id=”TqrSKenndIGZDAMpQ1hgBbq6Ssm61wsh”]Pasadena-based Alexandria Real Estate Equities is planning to pay $140 million to acquire 88 Bluxome Street in San Francisco, which today is the home of the San Francisco Tennis Club. The information was stated in the public real estate investment trust’s supplemental report for its third quarter 2016 earnings. The actual closing of the transaction could be deferred until the first quarter of next year.
Alexandria and its development partner on the project, San Francisco-based TMG Partners, are now working on the entitlements of the project. The total square footage being planned for the development is just over one million square feet, according to the document, and the plan as it goes now is to construct two buildings in separate phases.
In September of 2015, the developers proposed razing the existing three-story tennis club to construct a mixed-use project with 368,550 square feet of office and 5,500 square feet of retail space. The project site was also planned to include a 25,000-square-foot fitness club and four outdoor tennis courts. It was estimated at the time that the project would carry an estimated construction cost of $117 million, according to the preliminary project application filed with the city in 2015.
In March of 2016, the developers submitted a revised Preliminary Project Assessment (PPA) for a mixed-use project. In a prepared statement the two companies outlined a vision for the project but did not provide details on the size or scale of the development, which would more than double from the proposal submitted in late 2015.
The project falls under the city of San Francisco’s Central SoMa Plan. The city published in August of 2016 a revised plan and implementation strategy document that sets the vision of the Central SoMa Plan to create a sustainable neighborhood in the city by the year 2040. A number of developers, including Tishman Speyer, Kilroy Realty and Boston Properties, have lined up potential projects in the area and were effectively forced to place them on hold until the plan was finalized and approved. The final plan adoption, according to the city of San Francisco documents, could occur by May of 2017, although that timing is at the discretion of the Board of Supervisors.
Alexandria stated in the public document that upon completion of the acquisition, the seller may lease the property for a term of one year or more depending on certain factors.
Neither Alexandria nor TMG were available for comment except for the references made in the report.