CA: First look at plans to turn S.F. railyard into high-rise neighborhood with thousands of homes

The owner of the Caltrain railyards at the junction of Mission Bay and the South of Market in San Francisco is slated to file an application Tuesday for a development proposal that would turn the 20-acre property into a dense high-rise neighborhood with a new Caltrain station below an 850-foot skyscraper, thousands of homes and millions of square feet of commercial space.

Prologis, the property owner, is proposing a redevelopment that would total as much as 8 million square feet, with as many as 2,500 housing units and four million square feet of commercial space. It calls for the tower on the corner of Fourth and King Streets, and another high-rise at Seventh and King streets.

While Prologis anticipates a 15- to 20-year build out, the 2.5 million-square-foot first phase will include both planned towers. The project will be developed with a combination of private capital and public money.

The first phase is expected to include housing and office space, but the exact mix will depend on a number of factors, including interest rates, office tenant demand and investor interest. The project could also include a hotel.

The application comes more than a decade after the late Mayor Ed Lee floated the idea to redevelop the active railyards as part one of San Francisco’s most complicated development projects, the $8.25 billion downtown rail extension now called the Portal. The Portal project would extend Caltrain’s service from its current terminal at Fourth and King streets to the Transbay transit center, which would allow it to accommodate future high-speed rail service.

The first phase of the railyards project, however, can be completed before work starts on the Portal, which is currently not funded. It will include a new plaza in front of the redeveloped train station, with retail and restaurants and a children’s play area.

The site — bordered by Fourth, King, Seventh and Townsend streets — is currently Caltrain’s northern terminus, as well as an active maintenance yard. Prologis, a global real estate investment trust that specializes in industrial property, owns the underlying land, and Caltrain holds a perpetual easement to operate rail on the site.

At the heart of the vision is the need for a new Caltrain station and the increasing pressure cash-strapped public transit agencies are under to boost ridership by building housing next to its stations. Caltrain saw its ridership plummet 95% during the pandemic, but has bounced back sharply in the past year, with ridership jumping nearly 50% in 2025.

“The SF Railyards project application comes at a pivotal moment for transit in the Bay Area. Caltrain and our fellow transit agencies are navigating real near-term financial challenges — but this project points toward a different future,” said Michelle Bouchard, executive director of Caltrain. “This visionary, multi-phased project is a bold bet on San Francisco and on the long-term value of connecting people, housing, and jobs through great transit.”

The application marks the beginning of an environmental review and approval process which will likely last between one and two years. During this process, the San Francisco Office of Economic and Workforce Development will work with Prologis and Caltrain on a project agreement that spells out the mix of community benefits the project will include, from affordable housing to open space.

“This is all about improving Caltrain’s facilities, integrating with the future station for the Portal, improving street safety and street circulation,” said Leigh Lutenski, who heads up development for the Office of Economic and Workforce Development. “Transportation top to bottom, under every definition, is the singular focus of this one.”

San Francisco Mayor Daniel Lurie said the work along the city’s eastern waterfront — including in Dogpatch and Mission Rock — is “helping drive our entire city’s recovery.”

“This project will continue that momentum up into SoMa, leading with public space and transit access,” Lurie said. “The team behind this project has a bold vision for the neighborhood, and I appreciate their dedication to our city’s comeback.”

Prologis, which was founded in San Francisco and has been headquartered in the city for four decades, is the world’s largest logistics real estate company, with about 1.3 billion square feet of industrial space across 20 countries.

“This application reflects Prologis’ long-term conviction in San Francisco, and we are ready to move this transformational investment forward.” said Genevieve Cadwalader, Vice President for Prologis.

Prologis will likely start talking to potential tenants well before the environmental review is complete, and the timing could be fortuitous, according to real estate brokers.

Historically, the Caltrain yard at Fourth and King streets has acted as a physical and perceptual barrier between the SoMa and Showplace Square neighborhoods and Mission Bay, the 303-acre neighborhood nestled between Interstate 280 and the Bay that for much of the last decade was synonymous with biotech and life sciences. But, lately, it has morphed into a hotbed for artificial intelligence innovation.

Anchored by UCSF and biotech behemoths like Nektar Therapeutics, Mission Bay’s waterfront campuses were originally built with lab space and research in mind. Demand for such space surged during the pandemic, cementing the neighborhood’s reputation as one of the Bay Area’s premier biotech corridors. But the lab boom lost steam and commercial vacancies — recorded at nearly zero in 2019 — skyrocketed in subsequent years, with real estate brokerage CBRE reporting that more than 40% of the area’s leased labs and offices were sitting empty at the start of 2024.

Today, with biotech in retreat and AI startups driving fresh demand for offices, Prologis’ railyards project offers a chance to bridge the longstanding disconnect between Mission Bay and the Fourth and King corridor, potentially capturing tenant spillover while creating mixed-use space that links the waterfront hub more seamlessly to SoMa and downtown.

At least, that is the hope.

“This submarket is red hot. If there was any way to fast-track projects, now would definitely be the time,” said Robert Sammons, a senior research director with real estate firm Cushman & Wakefield.

“The Mission Bay market has shifted quickly from available sublease space to nearly leased out within 8 quarters,” said Alexander Quinn, director of research for brokerage JLL, who added that the neighborhood’s office availability rate is now below 10%.

Much of that momentum can be attributed to ChatGPT maker OpenAI planting its flag in Mission Bay in late 2023, a move that recast the neighborhood overnight into an emerging hub for AI innovation. The company has since grown its footprint in the area to nearly 1 million square feet of office space — its sprawling Mission Bay campus includes a pending sublease at 1800 Owens St., the former headquarters of tech firm Dropbox.

According to JLL’s data, the office vacancy rate in Mission Bay and adjacent China Basin was 32.5% at the end of last year. Once Sierra AI, Nvidia and other newcomers occupy their recently leased spaces, that rate is expected to drop to less than 9%.

“Considering the rapid organic growth of companies within this burgeoning submarket, we can expect developers to ‘kick the dirt’ in consideration of moving forward on new development,” Quinn said.

Sammons,of Cushman, said overall vacancy could soon be much lower once move-ins from recently signed leases occur and the pending lease deal at 1800 Owens is completed. Sammons attributed Mission Bay’s current office boom to some of its spaces being move-in ready “at the same time as AI companies began to rapidly expand” in the city, and also credited the neighborhood’s proximity to transit.

Longtime Mission Bay resident Bruce Agid, whose condo at 300 Berry St. overlooks the railyards, said he welcomes the development — even though the new tower will block his view.

“People say ‘won’t that 850-foot tower be horrible and block your view? ’” Agid said. “Right now I am looking out my window and I see five trains and 11 train tracks. We don’t have a community there, we have a railyard.”

He said the devil will be in the details.

“You have to do it right and make it beautiful,” he said. “You could have an 850-foot tower that is ugly or one that is amazing. Make it amazing.”

Don Cecil who has lived in Mission Bay since 2009, said that Prologis and its partners should model the railyards project after Mission Rock, where the San Francisco Giants and Tishman Speyer have completed two apartment buildings, a Visa headquarters, a new waterfront park and drawn eateries like Arsicault and Che Fico.

“I hope that we learn from everything that has been done at Mission Rock and knock it out of the park at the Railyards,” he said.

He said the market should dictate the mix of uses and determine what gets built when.

“In San Francisco everyone wants to pour their hopes and dreams of whatever their priorities are into a land use application,” he said. “They should have the flexibility to do more housing than office, or more office than housing, or 50/50 office and housing. Whatever works to advance the revitalization of that dirt as thoughtfully as possible.”

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