San Francisco Production, Distribution, and Repair Policy Study and Real Estate Advisory Services

City and County of San Francisco, CA

The City of San Francisco Planning Department engaged BAE to prepare market assessments and development feasibility analyses to explore how the City can incentivize the delivery of new Production, Distribution, and Repair (PDR) space.

The City of San Francisco is interested in protecting and prioritizing the development of PDR uses that generate well-paying jobs to a key segment of San Francisco’s workforce that may not have college or advanced degrees.  Unfortunately PDR space is often not the highest and best use for land in commercial districts, with new development often requiring a subsidy.

BAE conducted a market analysis to estimate the depth of demand for PDR space at different affordability levels.  BAE conducted interviews with several stakeholder groups to better assess the specific needs of PDR businesses with respect to location, space requirements, and other amenities, as well as with development firms with experience with PDR product to compile development cost and revenue assumptions for PDR, office, and residential development.

Based on the interview input, BAE created a series of prototypical development pro formas for PDR development.  In close coordination with City staff, BAE tested the feasibility implications of possible policy scenarios to inform the City of potential mechanisms for expanding the inventory of PDR space in San Francisco, including horizontally mixing PDR space with residential uses and vertically mixing PDR space with traditional and creative office uses to enhance feasibility.