A Tishman Speyer executive is taking on one of the nation’s toughest property turnaround tasks: reviving downtown San Francisco’s ailing economy in the face of a nearly $800 million deficit and underused real estate.
Mayor London Breed has hired Sarah Dennis-Phillips to fill a recently vacated role with the city’s Office of Economic and Workforce Development, a department responsible for spearheading its post-pandemic recovery efforts as San Francisco struggles to remedy one of the country’s highest office availability rates.
While the department tackles a mix of responsibilities — it distributes grants to small businesses, issues loans and helps residents with job placements — it has evolved in recent years to take on roles related to revitalizing downtown San Francisco as the neighborhood has faced a record number of vacancies and plummeting demand among tenants willing to fill them.
Dennis-Phillips, who has a track record as a longtime city planner and economic development manager, most recently worked as a senior director for Tishman Speyer. At the company, she worked for the past four years on projects including the development firm’s 392-unit Mira luxury condominium tower.
Her background in commercial real estate is expected to lend a necessary perspective in the city’s efforts to rebuild leasing demand and depressed property valuations. The vacancy rate in pockets of downtown San Francisco has soared to more than 26% over the past year, according to CoStar data, far higher than the less than 7% reported at the start of 2020.
What’s more, tenants are offloading more real estate than what they’re willing to take on, resulting in another 1.8 million square feet of office space added to the market over the past 12 months, according to the data.
“While some of the changes San Francisco has seen post-pandemic are painful, they also present an opportunity to rebuild our local economy with intention and forethought, to repopulate our streets with arts and affordability, and to broaden the benefits of economic growth to all of our residents,” Dennis-Phillips said in a statement.
The recently appointed urban planner will come on at a point when other San Francisco officials are pursuing a variety of strategies aimed at kickstarting the city’s recovery effort. Those include proposed tax breaks for new businesses opening locations downtown, streamlining the approval process for proposed developments, cleaning up the city’s planning codes and drafting legislation that would make it easier to convert unused office towers into possible housing.
Breed has been one of the strongest proponents behind a multitude of legislative changes she hopes will make it easier for real estate developers and investors, as well as prospective office and retail tenants, to see the appeal of investing in the city’s recovery.
In a statement, the mayor said Dennis-Phillips brings “a unique combination of public and private sector leadership experience will help steer San Francisco’s economic recovery.”