A nonprofit university in downtown San Francisco that opened more than a century ago as a night school for working adults may be torn down and replaced by a 46-story skyscraper.
Lincoln Property Co. and McCourt Partners are seeking to demolish the seven-story building at 536 Mission St. that has housed Golden Gate University since the 1960s and replace it with one of two options, according to an application filed with the city’s Planning Department late last week. Plans call for either a 700-foot tower with 1.3 million square feet of office space or a 650-foot mixed-use tower with about 554,000 square feet of office space and 370 apartments.
An affiliate of Lincoln and McCourt — a developer with experience in office, residential and hotel construction — purchased the 230,000-square-foot building at 536 Mission in June.
“Our dual entitlement approach for the site envisions two potential pathways, allowing us the flexibility to respond thoughtfully to market dynamics," a statement from the developers said.
Golden Gate University, famous for its evening law school for adults with day jobs, has struggled to stay afloat in recent years due to declining enrollment and revenue. The deteriorating state of the surrounding Financial District after the onset of the COVID-19 pandemic hastened its decline.
It's unclear whether the university would be involved in a redevelopment, though a statement says such plans would "maximize the site’s potential to serve both the university and the surrounding community,” the developers said.
"This partnership is designed to provide vital financial support for the university and greater opportunity to pursue its educational mission, while also responding to the demand for high-quality commercial and residential space in this vibrant area of San Francisco," according to the statement.
Investors have shown growing confidence in San Francisco’s recovering office market, fueled by artificial intelligence startups that are lining up to lease space in the city. Still, the city’s office vacancy rate remains among the highest in the nation. Across the country, office construction levels are at historic lows, and CBRE predicts office conversions and demolitions this year will exceed new office construction for the first time in decades.
Record office vacancy
The developers noted in the application that San Francisco is facing “a supply mismatch in terms of the type of office space that is needed and wanted” by office tenants. Either construction option would provide “premium, flexible workspace that meets today's market demands and addresses” the gap, they wrote.
If the developers win approval and proceed with the mixed-use proposal for the property, the plan outlines building a mix of studio, one-bedroom and two-bedroom apartments. Both the office and the mixed-use tower plans call for 46-story buildings and the demolition of the existing seven-story building.
In the wake of the pandemic, San Francisco is still saddled with millions of square feet of empty office space in its commercial center and a vacancy rate of nearly 23%. The situation is even more dire in the city's South Financial District, where office vacancy is above 28%.
The picture is quite a bit rosier for owners of trophy or so-called Class A+ buildings in major markets, which are exceeding 90% of pre-pandemic use on peak days, according to a midyear report from building security firm Kastle Systems.
Office owners across the country are investing in renovations to bring back workers after the pandemic emptied buildings and sent the national vacancy rate to a current record high of 14%, though new office construction remains below historical averages.
Whichever tower ends up getting built, it may have company. Last month, global developer Hines submitted plans for a downtown San Francisco office skyscraper, which at 76 stories and 1,225 feet would be the tallest building on the West Coast.
University plans
Lincoln's deal for the Golden Gate University property included a $21.9 million loan for the university to help it pay back debt on the building. Still, it's not clear whether the school has a future on the site.
Facing the imminent prospect of closure this year, the financially strapped university entered into an option agreement to sell its downtown campus.
Golden Gate's supporters said it served people who were often overlooked by elite law schools. A plan in early 2022 to keep the university afloat by selling property sputtered out due to the precipitous collapse of San Francisco’s commercial real estate market.
“GGU Law’s closure would have far-reaching consequences that extend well beyond the institution itself,” read a 2023 letter signed by hundreds of students and faculty in an attempt to save the law school. It discontinued its juris doctor degree program that year, citing declining enrollment and low pass rates on the bar exam. The rest of the school continues to offer programs in business, accounting, taxation and more.