The 47-story development at 30 Van Ness is actually going to be called Hayes Point. And its developers are being called crazy for building office space in the current slump, but they’re rolling up the Brink's truck anyway.
The old saying “Follow the money” is usually used when speculating about alleged corruption or high-reward wrongdoing. Consider another context for the phrase “Follow the Money.” How are a given industry’s most effective investors spending their money, and what does that mean for the future of the landscape of that industry?
Following the money in San Francisco commercial real estate investment market indicates that the office economy may not remain as moribund as people are saying it is. Yes, damn near every downtown tech company is desperately trying to sublease their office space. But following the money, we see the $700 million purchase and $250 million renovation of the Transamerica Building, the Dropbox building going for more than $1 billion, and now, as the Chronicle reports, the $1.15 billion project at 30 Van Ness (which will actually be called “Hayes Point”).
The 47-story project broke ground last month, as the San Francisco Business Times first reported. And it’s a highly unusual mixed-use project; combining more than 300 condos, nearly 300,000 square feet of office space, plus the obligatory ground-floor retail plus a ground-floor arts space.
Obviously, the office space is widely seen as a toxic proposition right now. The Chronicle describes the sad state of the current office real estate market by saying “Overall vacancy rate is 21.7%, up from 18.8% a year ago. In the Mid-Market sub-district, which in the tech boom of the 2010s attracted tech companies like Twitter, Zendesk and Uber, vacancy rate is even higher, at 24.7%.”
The Australian developer behind the project, Lendlease, feels they can buck that trend by being outside the Financial District. Admittedly, the unusual proposed architecture of this structure is going to furrow a few brows. But with Van Ness construction over and a healthy amount of new development coming into the area, the Van Ness-Hayes Valley ‘hood could be very much on the upswing.
After all, how do you know when a San Francisco neighborhood is on the upswing. When the realtors rebrand it with a new nickname, in this case, “The Hub.”