Derelict dirt lot to join Mid-Market revival

Market Street's most prominent derelict dirt lot is finally ready to join the Mid-Market revival.

Two years after buying a collection of properties on the south side of Market between Fifth and Sixth streets, developer Cypress Equities is set to start construction on a $150 million, 250,000-square-foot retail development.

Cypress has bought out its partner, the Carlyle Group, and will start construction in September, CEO Chris Maguire said. The development, known as Market Street Place, will be speculative - meaning Cypress will build it without having any tenants signed up.

"We just need to get it out to bid, get mobilized, and get building," Maguire said.

The development - the only major, ground-up retail project on the horizon in San Francisco - will probably end up quite a bit different from the original plans.

Taking the script from the previous property owner, Cypress had chased value-based retailers such as Target, Marshalls, JC Penney and Nordstrom Rack. All four of those stores considered the property, but Target ended up at the Metreon, Marshalls at 760 Market St. and Nordstrom Rack on the ground floor of 901 Market St. at the corner of Fifth.

As Cypress marketed the property, it became clearer that the off-price retailers weren't the project's best bet, so the project now is looking to be more upscale.

"We were not thrilled with the options we had on the tenant site. We started considering whether we should think about alternative types of uses," Maguire said. "We had more interest from fashion-forward, speciality retailers."

Cypress considered switching the site to housing or office space, but the politics could have been risky and time-consuming. Meanwhile, retail demand for the property was strong enough to justify construction.

In addition to fashion, the building has drawn interest from grocery, sporting goods and furniture stores as well as entertainment use. The fourth and fifth floors - the top story will have 18-foot ceiling, balconies and views - could work as a combination of food and entertainment, Maguire said, and a group that builds bowling alleys has looked at the plans, as has a cinema developer.

View post:
Derelict dirt lot to join Mid-Market revival