At a San Francisco Chamber of Commerce breakfast last month, Mayor London Breed made a curious pitch for the future of the troubled Westfield San Francisco Centre in Downtown.
“We have to look at Westfield mall, not as a mall losing stores, which probably most people didn't even shop in, but as a place ripe for reimagining from science to technology to lab space,” Breed said.
She echoed those statements during a radio interview last week, noting the potential for the property—a 1.2 million-square-foot mall in the middle of Market Street—to be used by higher education.
In retrospect, the comments read as softening the blow of Westfield’s decision, revealed days later, to give up the property because of declining sales, foot traffic and occupancy.
Part of Breed’s argument is that lab and research and development space have far lower vacancy rates than the broader office market. San Francisco’s 1 million square feet of lab inventory pales in comparison with traditional life science centers like the Peninsula (17 million square feet) or even Oakland (7.8 million square feet).
But is converting a major Downtown mall into a science hub feasible? The Standard consulted a number of life science brokers and developers, and the general consensus is that the concept is pretty much a nonstarter.
One longtime developer of lab space said that life science companies and development thrive in specific clusters like Mission Bay and South San Francisco. Pitching a life sciences or lab space development in a notably troubled stretch of Market Street would be especially difficult, the developer said.
There are also significant engineering and architectural barriers for life science conversions, which adds to the sheer cost of making space suitable for use as a research facility.
A life science conversions checklist put together by real estate firm Cushman & Wakefield included criteria like high load capacities for heavy equipment, specialized HVAC, plumbing and electricity capacity, as well as high floor clearances.
Discussions of how to transform the declining mall had been in the works for years. The owners previously proposed a plan to turn around 50,000 square feet of retail space into offices, but those plans stalled due to Covid.
When it comes to conversions into lab space, though, developers are often hunting for low-rise office buildings rather than a vertical shopping mall.
“The quantities of hazardous materials allowed in a building decreases as the building height increases, which makes a life sciences conversion difficult in a high-rise office building,” said Gregg Domanico, who helps lead the life sciences practice for real estate firm CBRE in the Bay Area.
There’s also the fact that the economics of San Francisco’s real estate market are still not particularly favorable for developers interested in conversions.
“There have not yet been any sellers of highly vacant office buildings in downtown San Francisco at a low enough price to make a conversion financially feasible for a developer,” Domanico said.
A proposal from Breed and Supervisor Aaron Peskin to lower the planning and zoning barriers for conversions in the city’s Downtown is still going through the legislative process.
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Jason James, a former industrial and office broker with TRI Commercial who is now the president of Context Commercial Real Estate, said there are a number of properties in San Francisco currently struggling to garner interest as potential life science conversion projects. Turning a shopping mall into a lab space would be an even more significant challenge with a huge price tag.
James said the types of properties most in demand by tenants are new ground-up developments that “have all the bells and whistles a lab user would want.
“I don’t want to be the guy telling the mayor she’s wrong, but I think she’s reaching for straws,” James said.
Editor's Note: A previous version of this article stated Jason James was still working as a broker for TRI Commercial. He recently left to start his own company Context Commercial Real Estate.