A panel of executives from the public and private sectors outlined a competitive agenda for downtown revitalization, permitting reform, and housing production at the annual industry gathering.
San Francisco is at an inflection point, and the commercial real estate industry is positioning to capitalize on it. That was the prevailing message from a panel of 5 industry leaders who gathered at the City Club of San Francisco on March 18 for CREW San Francisco’s annual Pulse of San Francisco: 2026 CRE Economic Forum, a lunchtime event that drew a packed room of CRE professionals for a wide-ranging conversation on the city’s trajectory.
Moderated by Anjee Solanki, national director of retail services at Colliers U.S., the panel featured Melinda McLaughlin, senior vice president and global head of research at Prologis; Sarah Dennis Phillips, planning director for the City and County of San Francisco; Shola Olatoye, chief executive officer of the San Francisco Downtown Development Corporation; Tamsen Plume, executive partner at Holland & Knight; and Kathryn Cahill Thompson, chief executive officer of Cahill Contractors.
AI and a Macro Tailwind
McLaughlin opened the discussion by framing San Francisco’s recovery within a global context. She noted that the United States is outperforming other regions economically, driven in large part by artificial intelligence investment. “AI is driving GDP outperformance today relative to other regions,” McLaughlin said, adding that investor skepticism toward the U.S. that existed roughly a year ago has dissipated. She pointed to San Francisco specifically as experiencing positive population growth and double-digit rent increases, with AI-related activity representing an estimated 35 to 40 percent of office leasing.
However, McLaughlin cautioned that the macro picture is not without risk. She noted that U.S. net migration turned negative in 2025 for the first time in a long period, dropping from roughly 1 million annual additions to an estimated negative 200,000. Consumer spending, she said, is tracking at about 2 percent growth, which she characterized as average. Interest rates remaining elevated also present a challenge. “Higher for longer may be our future,” McLaughlin said, noting the implications for adaptive reuse and development feasibility across asset classes.
A City Competing, Not Just Selling
Dennis Phillips, who became the city’s first female planning director after leading San Francisco’s Office of Economic and Workforce Development, reflected on how the city’s posture has evolved since the depths of the post-pandemic downturn. She recalled arriving at her previous role in the summer of 2023, just as the Westfield Center Mall entered foreclosure. “We cannot be more expensive than other cities. We cannot be more difficult than other cities. What we need to do is be competitive,” she said, emphasizing that San Francisco cannot rely on its status as the home of AI to overcome regulatory friction.
The planning director outlined tangible progress on permitting reform. The department has achieved a 100 percent success rate in returning completed plan reviews to project sponsors within 30 days, up from roughly 80 percent a year prior. Building permits are tracking at about 70 to 75 percent within that same 30-day window. The city is also unifying its entitlement, plan review, and inspection services into a single lifecycle under one department.
Dennis Phillips highlighted an AI-powered plan check tool expected to launch by July that will tell applicants whether their submissions are complete before they file. The city’s new Open Gov permitting portal, which launched its first phase on February 13, has already produced striking results: 50 percent of submissions on the initial permit types are occurring outside of normal business hours, and permit volume for those categories has doubled since the platform went live. “As we made it easier, more people are saying, ‘You know what? Now I’m going to do that,'” she said.
Reimagining Downtown as a Mixed-Use District
Olatoye described the mission of the San Francisco Downtown Development Corporation, a private 501(c)(3) entity launched in April 2025 under the Lurie administration. Downtown represents roughly 4 percent of the city’s land area but has historically generated close to 60 percent of its tax revenue, she said. The DDC has raised over $60 million in contributions including $20 million in loan capital to deploy toward catalytic projects.
“We are really focused on deploying [the] private capital for you all to see the reality of whether it’s clean, whether it’s safe, whether it’s arts, culture, and activations, whether it’s new, curated, more experiential retail,” Olatoye said. She noted that crime in downtown is down 40 percent and that the organization is developing a 10-year strategic investment plan alongside a sectoral analysis to identify growth industries beyond technology and AI. The DDC is also working on incentive tools to advance at least one office-to-residential conversion from an estimated pool of 40 to 50 candidate buildings downtown.
Construction Pipeline Shows Early Signs of Life
Cahill Thompson offered a ground-level view from one of the Bay Area’s most established general contractors. Cahill Contractors currently has 13 active projects across the region, down from a typical workload of around 20, with nearly all of the current pipeline in affordable housing. “We haven’t seen a market rate project really come across our desk in the last several years,” she said. “In the last couple months, we have seen a couple of market rate projects come across — not that they’re ready to go, but that they’re really crossing their fingers.”
She characterized the momentum as pointing toward a 2028 construction cycle, by which time the entitlement and design work now underway would reach the builder phase.
Balancing Speed and Inclusion
Plume, a veteran land use attorney who has practiced in San Francisco for decades, placed the current moment in historical context, noting that the city has been declared “ruined” by successive waves of change since the Gold Rush. “We have been ruined so many times,” she said, referencing articles spanning every era from post-war redevelopment to the dot-com boom to today’s AI wave. She cautioned that San Francisco’s high land values and construction costs create pressure on every stakeholder, and that maintaining economic diversity remains the city’s perennial challenge.
On the question of process versus outcomes, Plume urged the industry and regulators to evaluate each decision on its merits. “Not every decision is appropriately fast, and not every decision is appropriately slow,” she said, warning against allowing process to become a mechanism for avoiding risk rather than managing it.
Looking Ahead
Asked to name the single biggest opportunity facing San Francisco, the panelists were unified in theme if varied in emphasis. Cahill Thompson pointed to jobs and making businesses feel welcome. McLaughlin called for creating a vibrant city for young people. Dennis Phillips said housing in all its forms — from prefab infill modules to single-stair stack flats — is the essential need. Olatoye emphasized partnership between the public and private sectors. And Plume called for intensification and mixed uses to drive the 24/7 vibrancy the city aspires to achieve. “I hope intensification as a mix of uses to create that vibrancy that we’re all talking about is a great opportunity, and I hope to see it come to pass,” Plume said.
The forum also surfaced the challenge of transportation infrastructure. An audience member raised the issue of transit inadequacy as a barrier to downtown vitality. Dennis Phillips acknowledged the problem directly, noting that Mayor Lurie has made transportation funding a pinnacle priority for the November ballot. “We are not ever going to have New York subway infrastructure here,” she said, pointing to the prohibitive cost of rail construction in the United States and the need for innovation in last-mile solutions alongside bolstered public transit.
