When the spiraling 1,070-foot skyscraper and surrounding Transbay Transit Center rise above the South of Market neighborhood, there is another thing expected to ascend as well — the property values of surrounding commercial and residential buildings.
A new consulting study detailing the benefits of the SoMa district project — which will include a transit station serving 11 systems, a 5.4-acre roof park and a 1,070-foot skyscraper — projects a $3.7 billion increase to property values.
As a result of the transit, open space and development benefits, buildings up to three-quarters of a mile away from the project site will see some form of property value increase, according to Libby Seifel, president of Seifel Consulting, the firm that carried out the study.
With the increased property values, Seifel said, building owners will be able to charge higher rents for office spaces.
“By having such quick access to transit, businesses will be willing to pay extra for that convenience,” Seifel said.
People living near the development can also expect to pay increased rents, although Seifel said there are few residential buildings within the study area.
Seifel said the valuation estimates are based on the full build-out of the Transbay Transit Center, which includes the extension of Caltrain and high-speed rail to the site at Mission and First streets.
The first phase of the project, the $1.5 billion transit center, is fully funded and projected to be completed in 2017. However, the total project has a $2 billion shortfall, and no funds have been identified yet to build an underground tunnel for the Caltrain and high-speed rail extensions.
John Bozeman, spokesman for the Building Owners and Managers Association, said the Transbay Transit Center will be a great development for The City.
“If you can get people to work faster, that’s good for The City and the people who commute here,” Bozeman said. “It’s a win-win situation.”
The real estate report conducted by Seifel Consulting follows a 2009 study that projected the center would generate $87 billion in regional economic benefits.
Tom Radulovich, executive director of Livable City, an urban planning organization, said it’s usually hard to define the direct impacts of major development projects.
“I have a healthy skepticism of economic activity translating into actual benefits to humans,” said Radulovich. “Yes, this project will generate a lot of growth, but will that improve the lives of actual people?”
The Transbay Joint Powers Authority, the public agency overseeing the development project, will discuss the new property value report at its meeting Thursday.