Premium amenities and modern workspaces aim to attract tenants back to the city’s top office properties
Two prominent office properties along San Francisco’s waterfront are preparing for extensive renovations worth millions of dollars as owners seek to strengthen their appeal in a rapidly evolving office market fueled by artificial intelligence companies.
Elecor Properties, formerly known as Paramount Group, has unveiled early plans for major improvements at One Market Plaza and One Front Street. Located in some of the city’s most desirable business districts, both properties are being redesigned with a strong focus on hospitality-inspired amenities and enhanced workplace experiences.
During San Francisco’s previous technology boom, the buildings attracted major corporate tenants, including Google, Visa, Autodesk, and JPMorgan Chase. However, the shift toward remote work following the pandemic significantly reduced occupancy levels as many companies downsized their office footprints or relocated.
To remain competitive, Elecor is investing in a range of tenant-focused features that have become increasingly popular in premium office developments. The company says the upgrades are designed to improve the overall workplace environment and create experiences that encourage employees to return to the office.
The renovation strategy comes as San Francisco’s office sector shows signs of recovery after several challenging years. Property owners across the city have been working to adapt to changing demand patterns while addressing vacancies created by departing tenants.
The projects are part of Elecor’s broader $250 million capital improvement program, which includes upgrades to four office properties over the next two years in both San Francisco and New York.
Funding the Future
One Market Plaza, a 1.6-million-square-foot office complex built in the late 1970s, is set to receive a redesigned atrium bar, upgraded fitness facilities, a modern conference center, an executive lounge, and a rooftop deck overlooking the waterfront. The property currently maintains an occupancy rate of approximately 67%.
Meanwhile, the 650,000-square-foot One Front Street building will undergo significant improvements, including a renovated lobby featuring a café, bar, and restaurant. Additional enhancements include a new fitness center, upgraded meeting spaces, private lounges, and modernized elevator systems.
To support these investments, Elecor previously sold a 25% ownership stake in One Front Street through a transaction that valued the 38-story tower at $255 million. The move came as JPMorgan Chase prepared to vacate a substantial portion of its space within the building.
The company also faced challenges at One Market Plaza after Google reduced its office footprint by roughly 310,000 square feet, creating additional pressure on occupancy levels.
In late 2024, the real estate investment trust agreed to a $1.6 billion acquisition by asset management firm Rithm Capital, which viewed the transaction as an opportunity to benefit from an improving office market.
A Two-Speed Recovery
Rithm Capital also assumed responsibility for the mortgage on One Market Plaza, which carries an outstanding balance of approximately $850 million. Earlier this year, Rithm and Blackstone extended the loan for an additional year as part of a broader refinancing arrangement completed in 2024.
Although San Francisco office values remain below pre-pandemic levels, leasing activity has gained momentum thanks to growing demand from artificial intelligence startups establishing operations throughout the city.
Market conditions, however, continue to favor top-quality assets. Premium and recently upgraded buildings are attracting the majority of new leasing activity, while older properties with fewer amenities continue to struggle with higher vacancy rates.
Elecor executives remain optimistic that the planned renovations will help attract both existing and prospective tenants. Company leadership believes the enhanced amenity package will strengthen the competitiveness of its San Francisco portfolio in the years ahead.
The transformation follows another notable change at One Market Plaza, where the long-running One Market restaurant announced its closure after serving the property for more than three decades.
For the Record
Elecor is partnering with international architecture and design firm Perkins&Will, along with its A+I division, to lead the renovation and modernization efforts.
Source: Original reporting by Rachel Scheier, CoStar News.
