Steve Osborn had a few basic requirements in mind when he set out to find new offices in downtown San Francisco for the Mintz law firm, where he’s a managing member. It had to be a space that clients and employees would actually want to spend time in, be close to public transit and have a view.
“Instead of a bunch of conference tables, we wanted something that would create conversation and collaboration” among the firm’s 50 employees here in the city, Osborn told CoStar News. “We wanted to earn the commute.”
In the end, Mintz inked a lease for more than 29,000 square feet on the 30th floor of 525 Market St., one of San Francisco's largest downtown office buildings that recently underwent a $22.5 million renovation to lure tenants, as the newest and nicest offices show success in bringing workers back en masse.
The firm plans to move next spring into its new and larger space from its current digs occupying about 20,000 square feet at nearby 44 Montgomery St.
The new building features a lavish new amenity floor featuring extras from shuffleboard to CryoLounge recovery chairs to hors d'oeuvres by Wolfgang Puck. Dubbed the Cove, the floor is the latest ambitious investment by office owners across the country looking to bring back workers after the pandemic emptied buildings and pushed the national vacancy rate to a current record high of 14%.
The situation has been more dire in downtown San Francisco, an area still saddled with millions of square feet of empty office space in its commercial center and a vacancy rate of nearly 23%.
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.
Worth the trip
It remains to be seen whether amenities are the key to rescuing San Francisco’s office market long term, but newly renovated 525 Market St. is already faring better than many other downtown buildings. Its occupancy hit 80% as of early June, according to Cushman & Wakefield Executive Managing Director J.D. Lumpkin.
Law firm Goodwin Proctor relocated from Three Embarcadero Center in January to take two floors, while IEQ Capital recently inked a lease to occupy a full floor. The building’s biggest tenant is Amazon, which occupies nearly 40% of its space.
For Mintz, which specializes in representing life sciences and tech firms and has offices across the country, Osborn said The Cove was a draw, but that he was most drawn by what he called the building’s “forward thinking on community spaces.”
Lumpkin said the building was striving to offer workers so-called third places, where people can gather and socialize or work in venues other than their homes or offices. Younger workers especially “like to move around and not be chained to their desks,” he told CoStar News back in June.
Osborn said he was looking for an office that would fulfill a function closer to that of the Battery, an upscale private social club in downtown San Francisco where he is a member. Most of the Mintz attorneys and other workers commute to the office in-person at least three or four days a week.
“I understand — I live in the suburbs and I have three kids — it’s hard to come into the office every day,” he said. “We want to make sure people actually want to make the trip.”