Amazon Spends $200MM on PDR Development Site in San Francisco

By Meghan Hall

Amazon is moving ahead with its plans for expansion across the Bay Area. In a transaction announced today, the shipping and logistics company paid $200 million for a production, distribution and repair site where it plans to construct a brand-new delivery center. The property was sold by waste management company Recology.

Newmark’s Executive Managing Director Mark Geisreiter, Head of Northern California Capital Markets Steven Golubchik and Senior Managing Director Seth McKinnon represented Recology in the transaction. 

Located at 900 Seventh Street, the property totals 5.9 acres and sits at the confluence of San Francisco’s South of Market, Mission Bay and Potrero Hill neighborhoods. The site is currently developed with an office and two portable storage structures for fleet maintenance. The existing structures will be demolished to make way for Amazon’s newest project.

The development will be Amazon’s first in San Francisco and is expected to bring several hundred jobs to the city. Amazon plans to construct a 510,000 square foot distribution center on the parcel. The development would rise 57 feet in height, standing three stories tall. 122,000 square feet of logistics space, 22,700 square feet of accessory office space, and nearly 400,000 square feet of interior loading and staging space are designated in the plans. Amazon also intends to include 215,000 square feet of staging space on the center’s roof.

The newest plans are a departure from a project set in motion in 2018 to construct a mixed-use development on the site. Those plans—pitched by Recology— were set to include as many as 500 residential units, between 550,000 and 626,000 square feet of office space and ground floor retail. Between 200,000 square feet and 312,500 square feet of PDR uses were also planned for the property. 

The project was expected to cost around $850 million. At the time of Rheology’s original proposal, the City expressed resistance to the project, stating it would not support amendments to planning codes to allow for residential uses on the site, which was zoned in an effort to preserve PDR space.

Amazon’s latest project has yet to receive approval from the City, and so timing for completion of the development is unclear. Recology, an employee-owned firm that reported $1 billion in revenue in 2018, had owned the site for nearly 50 years before Amazon’s acquisition.

West Coast Commercial Real Estate News