What Does the Future Hold for 6X6?
Alexandria Real Estate Equities and TMG Partners recently bought the vacant property at 945 Market St. and future plans were undisclosed but Alexandria says it looks forward to securing a mixed-use project with a strong retail presence.
SAN FRANCISCO—The Mid-Market neighborhood has new restaurants, two large-scale hotels, housing developments and tech company headquarters. Other parts of the area are yet to be realized.
Developers Alexandria Real Estate Equities and TMG Partners recently bought the vacant property at 945 Market St. in the Mid-Market area. The price and future plans were undisclosed.
“We are excited to be bringing this important property under local control and look forward to securing a mixed-use project with a strong retail presence,” Alexandria Real Estate Equities tells GlobeSt.com.
Prior to opening in the fall of 2016, its name was changed from Market Street Place to 6X6. The six-story building on Sixth Street, hence the name 6X6, currently includes 250,000 square feet of leasable retail space. The $150 million project is still vacant other than the two-level below-grade parking garage containing 167 spaces.
While upper-floor retail is already being successfully done by Westfield in its San Francisco Centre one-half block away, this endeavor comes at a challenging time for retail. And, nearby Union Square is also a competitor.
With that said, the marketing brochure indicates that “6X6 is seeking forward-thinking purveyors of retail, technology and cuisine”. The space includes 270 lineal feet of floor-to-ceiling glass frontage on Market Street, central escalator access to six levels of retail, 44,000-square-foot floorplates, four loading docks and two freight elevators. It is being marketed by Cushman & Wakefield’s Kazuko Morgan, vice chairman, and Courtney Griffin and Mary Kate Banchero, directors.
The vacancy rate of retail market in San Francisco has been on the rise in the last couple of years, according to a second quarter report by Cushman & Wakefield. It closed the second quarter of 2019 at 3.6%, up 20 basis points from last quarter and 50 bps from a year ago.
The oft-discussed issues, such as strong competition from online retailers, a change in shoppers’ preference and behavior, high rental rates and soaring personnel costs remain the headwinds within the retail market. Other local reasons, such as seismic retrofits, the homeless problem, numerous construction projects that have made it a challenge to reach some storefronts, as well as various permitting and formula retail issues have further made doing retail business in the city more challenging, says Cushman & Wakefield.
However, demand for retail, especially for food and beverage, and entertainment in San Francisco is very strong and continues to increase. A robust economy, rising employment, increasing income and high level of tourism are driving greater levels of customer confidence and spending. Food and beverage, boutique fitness, co-working space and entertainment uses have been active with tenants looking for and occupying retail spaces throughout the city, says the report.