A $1.2 billion tower project in San Francisco was paused because the developer can't lure enough interest in the property during construction due to rampant crime and poor economic conditions.
The 540-foot Hayes Point tower was one of San Francisco's lone large building projects that was underway amid challenging local economic conditions and a crime wave, the San Francisco Chronicle reported.
The project had planned to bring 333 condos and 290,000 square feet of office space, but it's now on hold "until markets normalize," according to Lendlease Executive General Manager Arden Hearing.
Lendlease is "pausing construction on Hayes Point until markets normalize and we're able to bring in early tenancy commitments, or a capital partner, or both," Hearing told the newspaper.
San Francisco's Hayes Valley neighborhood has already lost Uber, Reddit, Block, and the city's largest Whole Foods which closed one year after opening, the Chronicle noted.
"We will monitor the markets while exploring options for a potential restart in 2024," Hearing said.
San Francisco, which recently forced X CEO Elon Musk to take down a new flashing headquarters sign, has seen its office vacancy rate reach an all-time high of 31% in June, according CBRE real estate broker.
The zip code in which the Hayes Point tower is located has seen a 12% dip in home prices from last year, according to the report.
"It was a decision over the last couple of months to pause but with really making sure we de-risk it appropriately before we're prepared to put further capital into that," Lendlease Global CEO Tony Lombardo said in Monday night's earning call.
The economic struggles in the area are nearly unilateral in the area, according to Supervisor Matt Dorsey.
"We're in a tough lending environment right now, and that's not unique to this project," Dorsey told the Chronicle. "Given the prominence of its location, Hayes Point is an incredibly important project, not just to my district but to the entire city."