Shopping Center Business

MAY 2018

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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RETAIL EVOLUTION 86 • SHOPPING CENTER BUSINESS • May 2018 100 STOCKTON SAN FRANCISCO, CALIFORNIA N o matter how many stores close as e-commerce grows more sophisticated, there are some retail addresses on the map that simply will never go out of vogue. Such is the case at 100 Stockton Street. This intersection, the corner of Stockton and O'Farrell streets in the heart of Union Square in San Francisco, sees as much traffic as New York's Times Square and London's Oxford Street. By some reports, approximately 18 million annual visitors pass through Union Square. What sits at the address currently is a Macy's Men's Store, housed in a hulking piece of limestone that's a prime example of the fortress-like architectural style of brutalism. The building was constructed in 1974. Macy's is selling several stores through- out the United States where the real estate has become more valuable than the retail operations within. Blatteis & Schnur, along with capital partner Morgan Stanley, seized this opportunity and purchased the property in 2017 for $250 million with big plans for the tony address. Renamed 100 Stockton, the project will become a multi-tenant 21st century destination for residents and tourists alike. Macy's will remain as a tenant until construction commences later this year. "The site is really in the heart of Union Square," says Ashley Brown, senior vice president at Blatteis & Schnur. "It's directly on the path of travel from the square itself to Westfield San Francisco Centre, and it's bookended by Neiman Marcus and Barneys New York on the two sides adjacent on Stockton. The real estate is really fantastic." The building is also situated along the new Central Subway, a current infrastructure project that will extend the Muni Metro T Third Line through SoMa (the South of Market district), Union Square and Chinatown. The subway extension is expected to be complete in 2019. Design is an enormous part of the project's metamorphosis. To say the building is getting a facelift would be an understate- ment. The exterior façade will be completely removed, replaced with terra cotta tiles, in keeping with the context of the histori- cal district. Gensler, the project's architect, plans to essentially turn the building inside out, thus creating a style completely antithetical to brutalism, known for its large masses of concrete walls and not many entrances, access points or, oftentimes, even windows. "This is old-school, department store architecture," says Jaymie Beckett, managing director with Blatteis & Schnur. The building was originally designed to focus on what's in- side, but when Gensler is through with it, the final building de- sign will feature multiple access points, interactive, indoor-out- door spaces on the ground floor, where there is 450 feet of street-level frontage, and tremendous glass line. A 10,000-square-foot rooftop experience will take advantage of the building's panoramic views. The project will ultimately offer up to 250,000 square feet of mixed-use — including re- tail, restaurant and office — on eight levels. "It will become a world-class mixed-use flagship retail location," Beckett says. 100 Stockton is expected to be open with tenants ready to receive holiday shoppers by 2020. Brown says the mix will lean on experiential tenants, such as artisanal food and upscale restaurants, entertainment, art or museum space and private club venues, as well as several flagship, retail boutiques along Stockton. Creative office space, with 13-foot ceiling heights, will occupy the top two floors. Blatteis & Schnur is a fully integrated firm with such deep roots in the city that many report its co-founder, Samuel Blatteis, was the first person ever to do a percentage rent lease in San Francisco, if not the first in the United States. The firm, then known as Hymans & Blatteis, was founded in 1922. Today, the company focuses on High-Street assets in some of the country's top urban markets, such as Los Angeles, Boston, Philadelphia and Charleston. "I think that we would all agree this is generational retail," Brown says. "This ownership plans to be a long-term holder. We are really passionate about this project. We think we're bringing something unique from a design and experiential perspective to the district." Adds Beckett: "This is not a redevelopment and flip strategy. Given the long-term hold, everything is being done to the high- est quality and standards." — Lynn Peisner 100 Stockton in San Francisco is envisioned as streetfront retail and restaurants, with creative office space above. Union Square sees approximately 18 million visitors annually. Credit: Gensler

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