Global warehouse developer Prologis has unveiled an ambitious plan to transform a rail yard near downtown San Francisco into a dense mixed-use neighborhood with thousands of new homes, an 850-foot skyscraper and millions of square feet of commercial space.
The company owns the 20-acre property between the city’s SoMa and Mission Bay neighborhoods that’s home to an active rail yard for the commuter rail line operator Caltrain. This week it formally submitted a redevelopment plan that would total as much as 8 million square feet, with up to 2,500 housing units and 4 million square feet of commercial space, including a tower with a new public transit station at its base.
The proposed project at Townsend and King streets between Fourth and Seventh streets is one of the most ambitious redevelopment projects proposed in San Francisco since the onset of the COVID-19 pandemic, which hit the city’s economy and real estate market particularly hard and put large-scale development projects on hold.
It’s the latest project that goes beyond industrial real estate for San Francisco-based Prologis. The company has plans underway to convert malls, warehouses, transit sites and even theme parks into mixed uses ranging from housing, retail and life sciences around the globe.
Prologis executives have said the firm is constantly evaluating the best opportunities for its real estate holdings everywhere.
“We always believe that logistics will have a good case for higher and better use opportunities given where our assets are located, not only in premier markets, but close in to consumers,” Chief Financial Officer Timothy Arndt said earlier this month at a Raymond James & Associates investor conference.
Rail yard to housing
The rail yard has been eyed for redevelopment for at least a decade. It currently functions as a barrier separating the South of Market, Showplace Square and Mission Bay neighborhoods, all areas that have blossomed in recent months as popular areas for AI startups and other businesses. The surge in leases has driven recovery in a part of the city that during the pandemic became known for its empty sidewalks and half-finished projects dating from the city’s last tech boom.
The company’s application comes more than a decade after the late San Francisco Mayor Ed Lee floated a plan to redevelop the rail yard as part of an $8.25 billion downtown project now called the Portal, a 1.3-mile rail extension to extend Caltrain — and eventually, high speed rail — from the Fourth and King street station to the downtown Salesforce Transit Center. The Transbay Joint Powers Authority, which oversees the project, estimates the extension — which is currently not funded — could open for passenger service in 2035, though that timeline has been revised several times.
In the meantime, Prologis believes the first phase of the revamp, a public-private partnership with Caltrain, can be started. The proposed initial phase would involve 2.5 million square feet of development, including the office tower, which could become one of the city’s tallest, if approved.
Prologis estimates that full build-out could take 15 to 20 years. At that point, the project could total 7 million to 8 million square feet, likely including office, retail and potentially a new hotel as well as the residential development, which would have affordable housing, the developer said, adding that the entitlement framework has “flexibility in the mix of uses to respond to evolving market conditions over the project’s multi-decade timeline.”
Funding is expected to come from a combination of private and institutional capital sources as well as public money for infrastructure and transit-oriented development.
Mixed-use ambitions
Prologis has moved forward on several mixed-use projects recently, with a good deal of that activity centered near the firm’s San Francisco backyard.
In the emerging East Bay city of Richmond, across the bay from San Francisco, Prologis is behind one of the area’s biggest redevelopments, with early plans to convert the largely vacant Hilltop Mall into homes, retail, entertainment, dining and commercial space.
Last year, the company paid $310 million for the Great America theme park in the Silicon Valley city of Santa Clara. Prologis officials told the Los Angeles Times that it is creating a master plan for the property, though the park is still open.
Outside of California, Prologis is also working on a major life science project in the United Kingdom through an expansion of Cambridge Biomedical Campus, the city’s largest employer, supporting more than 22,000 jobs. It feeds into the government’s modern industrial strategy, a 10-year plan to increase business investment and grow the “industries of the future,” which include artificial intelligence and life sciences.
For the most part, such redevelopments are one-off projects that appear to have more to do with a city’s unique needs than with a broader diversification strategy for Prologis. Warehouses and data centers still dominate the company’s portfolio, representing roughly 85% of the firm’s holdings.
“There’s a lot of opportunity to seize here in data centers and growth of our strategic capital business. But you’re not going to see any strategy shifts, anything that moves away from our knitting of consumption-based infill, logistics real estate, focus on the customer, utilizing strategic capital and creating a lot of value through development. Like that’s the core of this company, and that will continue,” Arndt said at the Raymond James conference.
Indeed, Prologis is staying active on the industrial development front with big warehouse plans for its hometown. Late last year, it won official approval to build a massive industrial project called the SF Gateway project, a 1.6 million-square-foot proposal that would be one of the largest industrial developments in San Francisco’s history.
Two modern warehouses are planned to replace four World War II-era warehouses spread across 17 acres in the city’s Bayview Hunter’s Point neighborhood. If it breaks ground, it would be among the largest warehouse projects under construction in the United States.
Forward momentum
San Francisco Mayor Daniel Lurie said the rail yard project would help accelerate the recovery already underway along the city’s eastern waterfront.
“This project will continue that momentum up into SoMa, leading with public space and transit access,” Lurie said in a statement. “The team behind this project has a bold vision for the neighborhood, and I appreciate their dedication to our city’s comeback.”
Prologis estimates that securing the blessing of city leaders and transit officials could take some two years.
Vice President Genevieve Cadwalader said in a statement that the San Francisco-based developer was “ready to move this transformational investment forward.” She added: “We have engaged extensively with community organizations and neighbors to help shape the project we are advancing today,” which she described as “an innovative public-private project that will create a dynamic mixed-use neighborhood, enhance mobility and thousands of jobs."
In recent months, explosive growth across the AI sector, coupled with many companies’ emphasis on in-person work, has translated into a procession of office deals that has helped reshape demand dynamics in many pandemic-battered cities.
In San Francisco alone, AI tenants are on the hunt for about 9 million square feet of office space, up from 6.5 million in early 2025, according to JLL.
“This is exactly the kind of development San Francisco needs — one that helps knit together multiple neighborhoods with enhanced public access and new gathering places, brings housing and a high density mix of uses to a transit-oriented site, and helps deliver essential infrastructure improvements both for our regional rail system and the South of Market streetscape,” said Anne Taupier, executive director of San Francisco’s Office of Economic and Workforce Development, in a statement.