The latest tenant to vacate a trophy property on the San Francisco waterfront is the nationally acclaimed One Market restaurant, an eatery that announced it would close after more than three decades in the space.
The restaurant’s leaders said in a note posted on its website that they had decided to shut its doors after failing to reach a deal to sell the business to the restaurant's current management. The departure is the latest tenant downsizing at the One Market Plaza complex that’s housed the award-winning eatery since 1993.
Silicon Valley tech giant Google recently dumped about 310,000 square feet of space at the building, leaving its landlord, the Paramount Group, scrambling to avoid a significant blow to its portfolio occupancy.
The New York-based real estate investment trust has sold a 25% stake in its nearby One Front Street office tower as part of a deal that values the 38-story downtown property at $255 million. Proceeds from the nearly $64 million interest sale will be put toward a capital improvement plan aimed at addressing the property's looming vacancy spike as it prepares to lose its largest tenant, JPMorgan Chase.
“Considering our confidence over the long-term in the San Francisco market, this transaction provides access to partner capital to reposition the asset ahead of the upcoming lease-up phase," CEO Albert Behler said in a statement of the deal.
One Market Plaza comprises two high-rise office towers on top of a six-story office building, a two-story subterranean parking garage and approximately 60,000 square feet of retail space a block from San Francisco’s iconic Ferry Building and "many of the city’s most prestigious restaurant, retail, and fitness locales," according to real estate marketing materials. The international high-end restaurant and lounge chain STK Steakhouse is also housed there.
Peter Brindley, Paramount's executive vice president of leasing, told analysts on the landlord's earnings call this month that “plans are currently being developed to deliver exceptional amenities at both One Market Plaza and One Front Street, [and] we are confident that our amenity plan will resonate with existing tenants and prospective tenants alike.”
Fewer tenants
One Market occupies just 10,000 square feet on the building's ground floor, but it has outsize prestige.
The restaurant has been a beloved go-to for business lunches, dinners and celebrations in the city’s Financial District, earning a Michelin star from 2008 to 2012 for its farm-to-table American fare. Chef Bradley Ogden and restaurateur Michael Dellar earned glowing reviews and numerous culinary awards, serving seven San Francisco mayors, two U.S. presidents and countless celebrities of various stripes over the course of the restaurant's 32 years in business.
The decision to close apparently was also spurred in part by Dellar’s decision to retire this year.
“With a Founder's 80th birthday looming large, a hoped-for sale and assignment to the current management team not in the cards, and the after-effects of COVID-19 still prevalent, the decision was inevitable and bittersweet,” read a note posted on the restaurant’s website.
It said One Market would serve lunch, dinner and “all-day happy hour” until it closes its doors June 11.
“One Market survived three financial crises, a dot-com crash and 9/11,” the note said.
In a city that once ruled the nation in restaurants per capita, San Francisco lost hundreds of restaurants to the effects of the COVID-19 pandemic, according to data from the Golden Gate Restaurant Association. The city’s food industry has recovered somewhat since, but persistently high costs and lower foot traffic — especially in the downtown area where office buildings remain half empty — have made restaurants' survival exceedingly difficult.