Aralon Properties bets on Union Square office market with new plans for Market Street building - San Francisco Business Times

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Union Square's office market clocked a 21% vacancy rate at the end of 2022. That isn't stopping a San Francisco developer from proposing a major reworking of an existing commercial building largely for office use.

It’s been a quiet few quarters for San Francisco’s office market — but that isn’t stopping Aralon Properties.

The San Francisco developer has plans to renovate and expand the existing office and retail building at 838-842 Market St., according to documents filed with San Francisco’s planning department Feb. 17. Aralon, which owns a cadre of other office and retail properties in the city and in Silicon Valley, wants to retain the basement and first two floors of the roughly 65,000-square-foot building as retail. It wants renovate the third, fourth and fifth floors for modern office use and add a sixth floor, nearly 10,000 square feet, also for use as office.

Union Square’s 3.2 million-square-foot office market reached 21% overall vacancy rate in the final quarter of last year, and its retail market has also struggled through the course of the pandemic,Aralon, which did not respond to request for comment for this story, was a minority partner in a group of buyers that

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