SAN FRANCISCO—The sale of 6X6 at 945 Market St. to Ingka Centres San Francisco LLC means an urban format IKEA is soon to be part of the city landscape. The seller, MSP Property LLP, a company controlled and owned by Alexandria Real Estate Equities Inc. and TMG Partners, acquired the retail property in August 2019.
Since then, the $150 million project remained vacant other than the two-level below-grade parking garage containing 167 spaces. Prior to opening in the fall of 2016, the property’s name was changed from Market Street Place to 6X6, a reference to the six-story building on Sixth Street.
The neighborhood has been patiently waiting for this building to welcome tenants and the joint venture is “thrilled to be able to execute a signature retail transaction in this current environment”, said Matt Field, TMG Partners president.
“Ingka Centres is an extremely strong shopping center company that will be bringing IKEA to San Francisco,” Field tells GlobeSt.com. “This is a great addition to the city. We are elated to have them at 6X6 and look forward to welcoming them to the neighborhood soon.”
Ingka Centres, part of the Ingka Group (which also includes IKEA Retail and Ingka Investments), will transform and redesign the 6X6 building into a new retail destination that’s anchored by IKEA and complemented with mixed-use offerings that are “suited to the San Francisco lifestyle”. The IKEA store and first phase of redevelopment are slated to open in fall 2021.
The acquisition is Ingka Centres’ first in the United States, representing a milestone for the company, which in 2018 announced a new strategic vision and investment of approximately $8.6 billion to transform its business in response to the changing retail environment.
“Our urban projects are all about getting closer to our customers,” says Gerard Groener, Ingka Centres’ general manager. “6X6 is an impressive six-floor glass building, with smart modern design and internal areas that provide the ideal canvas to create something truly spectacular. We believe Ingka Centres can transform the performance of well-located assets like 6X6 by aligning their offers to how people want to spend their time. We’re so excited about the potential that 6X6 building represents to Ingka Centres and local communities.”
6X6 will be Ingka Centres’ second mixed-use project in a downtown location, following the company’s acquisition of Kings Mall in London’s Hammersmith earlier this year. The company is evaluating opportunities within 40 major cities across Europe, Russia, North America, Asia and Oceania to introduce its urban destinations. The company is actively targeting sites for similar US projects in New York City, Los Angeles and Chicago.
All anchored by IKEA stores, these urban projects are designed to complement the IKEA Retail US strategy of opening smaller format stores within city centers in response to global urbanization trends, changing customer behavior and the digitalization of retail.
“It’s an exciting time for IKEA Retail US as we enter this next phase of our expansion into major US cities,” says Javier Quiñones, IKEA Retail US president. “Globally, IKEA is evolving to be more convenient for customers wherever they are. We feel energized by the opportunity to bring a new, more accessible shopping experience to the many customers in San Francisco. It has been a pleasure working with mayor London Breed and her office on this project, and we look forward to meeting our new neighbors in the future.”
Ingka Centres’ redevelopment plans for 6X6 will be driven by the needs of the local community. The company will work closely with tenants and partners to create a place people want to visit long into the future. The property will also be redesigned around the IKEA People and Planet Positive strategy, which will make the building more sustainable and promote sustainable living. Ingka Centre will promote recycling, greener spaces and improved air quality, among other initiatives at 6X6.
“The presence of this great retailer in the heart of our city will be transformative for our Mid-Market neighborhood, create more jobs and offer a great new shopping experience for our residents. We greatly appreciate all the work that Ingka Centres and IKEA have put in with our office to help make this a reality, and we look forward to celebrating when they settle in their new home. This investment and the addition of IKEA will be transformational for our Mid-Market neighborhood and a welcome reminder that while the present is challenging, San Francisco remains a place businesses want to locate,” said Breed. “City staff spent months working to attract IKEA, and we’re going to continue working to bring new retailers, new employees and new visitors back to the heart of our city to help speed our recovery.”
The property comprises more than 375,000 square feet, including the building’s parking garage. Its gross leasable area is approximately 256,000 square feet with an atrium linking the floors together. The space includes 270 lineal feet of floor-to-ceiling glass frontage on Market Street, central escalator access to six levels of retail, 44,000-square-foot floorplates, four loading docks and two freight elevators. The Gensler-designed development is situated between Union Square, the Hotel District and SOMA.
Kazuko Morgan, vice chairman of Cushman & Wakefield represented the seller.
“This sale has substantial impact to San Francisco and to Mid-Market in particular. From a retail standpoint, the larger floorplates offered by 945 Market Street/6X6 suit the needs of an occupant such as IKEA to display its furniture, home furnishings and food offerings while the property provides ample on-site parking which is rare in San Francisco. IKEA makes a fantastic addition to Market Street and in helping anchor this exciting new retail destination for the city of San Francisco, together with other mixed-use offerings,” Morgan tells GlobeSt.com. “The burgeoning Mid-Market neighborhood also has other rousing development plans and brands in process, which are filling vacancies and creating a synergistic environment. Right across the street from 945 Market will be Serif, a new mixed-use development anchored by The LINE Hotel, a new 236-room hotel featuring a ground-floor retail, bar and restaurant in addition to a rooftop bar, together with 242 new condominium residences. A new Whole Foods is opening in the spring of 2021 at Trinity Place, its largest store in the city. This is in addition to Supreme, a global cult streetwear brand, and Yotel, a hip and cutting-edge hotel concept, which opened last year further down Market Street. There are also several other exciting retail openings coming soon in the neighborhood.”
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September 09, 2020 at 03:00PM
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IKEA to Bring Urban Format to Long-Dormant 6X6 in San Francisco - GlobeSt.com
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