By Katie Burke
A developer has cut the cord on plans for a 105-room hotel in Mid-Market at 1236 Market St. After proposing an additional six stories for t he former two-story gym earlier this year, developer 1234 Market Street LLC sold the property in late August to a local nonprofit.
The hotel would have joined a handful of others proposed for the downtown area. The Proper Hotel at 1100 Market St. opened earlier this month with a rooftop bar, three dining areas and rooms starting at $400 a night. The 200-room Yotel will make its debut later this fall at 1095 Market St. A 160-room hotel has been proposed across the street at 1055 Market St., just up the street from another 160-room hotel proposal at 1125 Market St.
Momentum throughout Mid-Market has been building up in recent years as a host of residential, retail and hospitality proposals have joined the area’s development pipeline.
But reality in the area hasn’t quite lined up to expectations.
At 6×6 — the vacant 264,000-square-foot retail center sandwiched among the area’s hotel proposals — for example, the project has taken longer than expected because projects have taken longer to get built.
Cypress Equites CEO Chris Maguire said when the Dallas-based developer bought the property four years ago, there were a plethora of deals made in the surrounding area. Now, just a handful of those have actually made it to the finish line.
“The biggest impediment for us has been the lack of progress for other projects,” Maguire said of 6×6’s address at 945 Market St. “For whatever reason, it has taken everyone a really long time to get them out of the ground. That has hurt us.”
Mid-Market has nearly 600,000 square feet of retail, but more than 47 percent of it was vacant at the end of the second quarter with almost all of that vacancy due to 6×6, according to Cushman & Wakefield, which is also responsible for leasing the project.
The area’s 104,000 square feet of office space was only 3.2 percent vacant, according to Cushman & Wakefield research.