A $1 billion office tower planned for the corner of Fourth and Harrison streets in San Francisco's Central SoMa neighborhood just got a new lease on life, after sitting frozen for years without a single committed tenant. The San Francisco Planning Commission voted this week to grant developer BXP an 18-month extension on its entitlements for the 981,000-square-foot project at 725 Harrison St., pushing the deadline to March 2028.
BXP, the San Francisco-based developer formerly known as Boston Properties, first requested roughly $1 billion from its board back in January 2020 to fund the speculative office building, according to the San Francisco Chronicle. The board allocated the money even though the project had no committed tenant at the time, and the plans call for a day care center, retail space, and a land dedication for affordable housing alongside the office towers. Then the pandemic hit, and the project stalled almost immediately.
BXP executive Aaron Fenton said the company paused, reevaluated, and waited for the market to recover, per the Chronicle's reporting. That wait stretched on for years as remote work gutted downtown office demand, and city leaders even considered pulling the plug on office-only zoning altogether. In July 2024, then-Mayor London Breed introduced legislation to eliminate office requirements for key Central SoMa sites, including 725 Harrison Street, giving developers the option to build housing instead after neighborhood office vacancies topped 38%, according to the City of San Francisco.
An AI Leasing Boom Changes the Math
Instead, the office market did an about-face. San Francisco's office vacancy rate was 29.2% in the second quarter of 2026, with 963,980 square feet of net absorption, according to CBRE. The Real Deal reported that the rate was roughly 29.7%, down 5 percentage points from 34.7%—the largest such decline among major U.S. cities—and that artificial intelligence companies alone accounted for 30% of all San Francisco office leasing activity between 2023 and mid-2026, generating more than 75% of the total net market absorption, per The Real Deal.
Leasing activity elsewhere offers evidence of demand, but not a commitment to 725 Harrison. The Chronicle reported that OpenAI has leased 1.1 million square feet across multiple Mission Bay buildings and Anthropic about 1 million square feet along Howard Street in SoMa. San Francisco has recorded seven consecutive quarters with more than 2 million square feet of leasing activity, the newspaper reported. BXP also leased 200,000 square feet at its 680 Folsom building over the last six months, bringing that property close to full occupancy.
The Chronicle reported that BXP executive Aaron Fenton identified roughly 9 million square feet of tenant demand in the market, driven largely by fast-growing AI companies. Executive Alex Weinberg said the extension gives BXP more time to market the project and pursue a tenant.
Pre-Leasing Threshold Still Stands in the Way
Even with renewed demand, BXP executives have said high interest rates and construction costs mean some space must be pre-leased before financing can move forward. The 725 Harrison project is designed to be built in phases, with the first building totaling 550,000 square feet. BXP may require 30% to 50% pre-leasing of that first building before breaking ground, which works out to somewhere between 165,000 and 225,000 square feet of committed tenants.
BXP has completed construction drawings and has site permits ready to pull, the Chronicle reports, and the company plans to keep preparing the site for construction. Demolition of the existing vacant buildings on the property could start next year. Designed by HOK Architects, the approved plans call for a 185-foot, 14-story structure with an eight-story podium capped by two 105-foot oval towers styled to look like separate buildings, incorporating 29,500 square feet of PDR uses and two publicly accessible POPOS areas, according to SF YIMBY.
A Decade-Long Project With Housing Attached
The San Francisco Planning Commission originally approved BXP's project back on December 12, 2019, and approved modified plans in June 2022 before granting the latest extension this week, according to Houseberry. BXP had initially held the site as a joint venture with Barrett Block Partners before buying out its partner for $140.1 million in June 2020 to take full ownership, per SF YIMBY's reporting at the time.
As part of its development agreement, BXP set aside a 15,000-square-foot parcel known as Lot 149 for dedication to the Mayor's Office of Housing and Community Development, which earmarked the site for a 144-unit, 100% affordable housing building — a commitment tied directly to the office project moving forward.
The Planning Commission's vote to unanimously approve the extension came Thursday. Commissioner Lydia Soo called BXP's project message encouraging, but noted that the developer has already been working on this project for 10 years. Soo said she hoped it would not take another decade to begin construction, and she urged BXP to secure a tenant and finally build the project.
Delays extend beyond 725 Harrison
A separate Central SoMa office project also encountered a setback: the San Francisco Chronicle reported that Pinterest canceled a lease in 2020 for most of the planned office campus at 88 Bluxome St., delaying that project. The episode provides another example of how changes in tenant commitments have affected development in the neighborhood.
The 725 Harrison project is one of five large developments approved under the Central SoMa rezoning effort, adopted by the San Francisco Board of Supervisors in December 2018 after seven years of planning. The San Francisco Planning Department says the plan is expected to deliver nearly 16 million square feet for new housing and jobs, along with more than $2 billion in public benefits. The Central Subway opened in January 2023 to help serve the neighborhood, but Central SoMa developments broadly have remained stalled in the years since — leaving 725 Harrison as a test case for whether the AI-driven leasing rebound can finally get shovels in the ground.
