At a San Francisco Chamber of Commerce breakfast last month, Mayor London Breed made an odd proposition for the future of downtown’s troubled Westfield San Francisco Center.
“We need to think of Westfield Mall not as a mall that’s losing stores that probably most people haven’t even shopped in, but as a place ripe for a reinterpretation from science to technology to lab space,” said breed
She repeated those statements in a radio interview last week, citing the potential of the property — a 1.2-million-square-foot mall in the middle of Market Street — for college use.
In hindsight, the comments seemed to soften the blow of Westfield’s decision, revealed days later, to abandon the property due to declining sales, foot traffic, and occupancy.
Part of Breed’s reasoning is that laboratory, research and development space has far lower vacancy rates than the broader office market. San Francisco’s 1 million square foot lab inventory pales in comparison to traditional life science centers like the Peninsula (17 million square feet) or even Oakland (7.8 million square feet).
But is converting a large downtown mall into a science center feasible? The standard has consulted a number of life sciences brokers and developers and the general consensus is that the concept is hardly new.
A Westfield Mall employee cleans a stair wall on the second level of Market Street in downtown San Francisco on Thursday, May 4, 2023. | RJ Mickelson/The Standard
A longtime lab space developer said life sciences businesses and development are thriving in certain clusters like Mission Bay and South San Francisco. Planning a life sciences or laboratory space development in a particularly troubled part of Market Street is particularly difficult, the developer said.
Additionally, there are significant engineering and architectural hurdles to life sciences conversions, increasing the sheer cost of repurposing space for use as a research facility.
A life science remodel checklist compiled by real estate firm Cushman & Wakefield included criteria such as high loading capacities for heavy equipment, special HVAC, plumbing and power capacities, and high ground clearances.
For years there has been discussion about how the run-down shopping center can be redesigned. The owners had previously proposed a plan to convert around 50,000 square meters of retail space into offices but those plans fell through due to Covid.
However, when it comes to converting into laboratory space, developers often look for low-rise office buildings rather than a vertical mall.
“The levels of hazardous materials allowed in a building decrease as the building rises, making the life sciences transition in a high-rise office building more difficult,” said Gregg Domanico, who heads the life sciences practice at real estate company CBRE in the Bay Area.
In addition, the economic situation in the real estate market in San Francisco is still not particularly favorable for developers interested in remodeling.
“There have never been sellers of heavily vacant downtown San Francisco office buildings at a price low enough to make a remodel financially feasible for a developer,” Domanico said.
A proposal by Breed and Supervisor Aaron Peskin to lower planning and zoning barriers for downtown redevelopments is still in the legislative process.
Jason James, a veteran industrial and office broker at TRI Commercial, said there are a number of properties in San Francisco right now that are struggling to generate interest as potential life science conversion projects. Converting a mall into a lab space would be even more of a challenge, and at a huge cost.
James said the property types most sought after by renters are new, built from the ground up buildings that “have all the bells and whistles a lab user would want.”
“I don’t want to be the guy who tells the mayor she’s wrong, but I think she’s grasping at straws,” James said.
