Hearst Corp. is relocating its newspapers from the Chronicle building at 901 Mission Street to proceed with a 400-unit condo tower next door that will be the second and final phase of the $1B 5M development.
The media company has purchased 450 Sansome Street, a 16-story, 134K square foot office building in the North Financial District, an acquisition that will enable the company to temporarily relocate its San Francisco Chronicle and SFGate newspapers from the iconic, century-old Chronicle building.
The sales price for the acquisition was not disclosed.
The relocation will enable Hearst to move forward with the final phase of 5M, a redevelopment of a four-acre site at the corner of Fifth and Mission streets in the South of Market.
The residential tower at 110 Fifth Street is slated to rise at the corner of Fifth and Natoma on a parcel occupied by the former home of the San Francisco Examiner. The Examiner’s former building and the 200K square foot Chronicle building share HVAC and electrical systems, necessitating the relocation from the Chronicle landmark before the tower development can proceed.
“Hearst is currently engaged in discussions with the City and consultants to move forward with the preparation of the site for future development,” Hearst said in a statement, adding that part of the existing Examiner building will be demolished.
Brookfield Properties delivered the first phase of the 5M project in 2022, including a 640K square foot office building at 415 Natoma Street and a 302-unit apartment building known as the George, which were built on a parcel Hearst sold to Brookfield's predecessor, Forest City.
Hearst hit pause on the second phase of the 5M project in 2023, citing market conditions in downtown San Francisco and construction costs. The centerpiece of the project, the Natoma Street office tower, is 97% vacant, the Chronicle reported.
The new home for the Chronicle and SFGate, 450 Sansome, is in proximity to the Transamerica Pyramid and Jackson Square. While the city’s hollowed-out downtown core struggles to recover, Jackson Square, a small, historic office district of roughly 14 acres has been thriving.
Since leaving Apple five years ago and forming a “creative collective” firm called LoveFrom, legendary iPhone designer Jony Ive has purchased five buildings in Jackson Square.
Last fall, city officials reached a deal with Lendlease aimed at reviving the largest stalled project in San Francisco, a 47-story mixed-use tower at the intersection of Market Street and Van Ness Avenue. The approved plans for 30 Van Ness envision 333 condos above 290K square feet of office and retail space.
In August 2023, Lendlease halted construction on the $1.2B project, known as Hayes Point, after excavation and initial foundation work were done at the site. In May of last year, the Australia-based developer announced a strategic shift to pull out of international development and sell several U.S. assets.
City approvals granted in 2020 for the Hayes Point tower included a 25% on-site affordable housing requirement that designated 83 of the units in the tower to be offered at below-market rates. In September, the city agreed to strike the affordability requirement, making the 83 condos market-rate units.
Source: GlobeSt/ALM