Preliminary plans have been filed to transform a portion of the historic Warfield Building in the city’s Mid-Market neighborhood into 34 apartments—in what would be the first office-to-residential conversion since the pandemic.
The plans to transform the building at 988 Market St. were filed by San Francisco developer Group i, which aims to turn around 25,000 square feet in the building into 27 market-rate apartments and seven listed as affordable.
In addition, the developer hopes to remodel the basement to accommodate 36 bicycle parking spaces and turn the second floor into a gym for residents. The redevelopment is estimated to cost around $9 million.
The building also contains the Warfield Theatre, a historic 2,300-seat venue with its marquee on the exterior; neither the theater or its marquee is expected to be impacted by the conversion. The plans were initially reported by the San Francisco Business Times.
Mark Shkolnikov, a principal for Group i, said his firm has its offices on the fourth floor of the building and is planning the conversion of floors 5-9 into apartments.
“The floor plates lends itself really well with a lot of natural light,” Shkolnikov said, adding that a major draw for the project is the potential to take advantage of historic tax credits to help finance the conversion. The Warfield building is part of the Market Street Theatre and Loft Historic District, which is listed on the National Register of Historic Places.
Shkolnikov said Group i is waiting on feedback from the city to determine its path forward.
San Francisco Planning Director Rich Hillis confirmed that the preliminary filing represents the first submission of an office to residential conversion since the pandemic, although he noted that the project is still in the early stages.
“It’s what we would expect to see in these conversion projects,” Hillis said. “These are the types of building we’d expect older Class B and Class C buildings with smaller floor plates, which make conversion into residential easier.”
Office-to-residential conversions have been front of mind for many as the pandemic-led shift to remote work has hollowed out the city’s Downtown. However, a number of cost and construction challenges mean they remain rare in San Francisco.
Over the past 20 years, only seven major office buildings have been converted into homes, totaling less than 800 units, according to Hillis.
Office-to-residential conversions fall under the larger umbrella of adaptive reuse projects that includes efforts to turn the former Granada Hotel into permanent supportive housing. However, even in this category, San Francisco ranks behind fellow Bay Area cities like Berkeley and Oakland in successful apartment conversions, according to data from Yardi Matrix.
Mid-Market has been hit particularly hard by the pandemic exodus. The neighborhood currently has a total vacancy rate of 32.7%, compared with 24.1% for the city as a whole, according to data from JLL.
Previously, the neighborhood was the beneficiary of city policies, including the controversial Twitter Tax Break spearheaded by the late Mayor Ed Lee, which brought in an influx of new companies and investment to the neighborhood.
Initially constructed in 1922, the Warfield building has gone through a number of ups and downs throughout its storied history, which includes legendary Bay Area figures like Bill Graham and Jerry Garcia. Group i purchased the property in 2012 and spent millions renovating it to attract this new cohort of companies.
But then came the pandemic, which along with the departure of major companies, likely worsened issues around homelessness and street conditions.
Part of the hopes for revival of the neighborhood rests on another Group i project, the mixed-use Serif development at 960 Market St. that includes 242 condos, the trendy The Line SF hotel and the the only Bay Area outpost of buzzy café Alfred Coffee.
“For the Mid-Market area to thrive, we need to blur the boundaries between residential and commercial and make it more of a 50-50 split,” Shkolnikov said.
Kevin Truong can be reached at [email protected]