Top 10 SF Peninsula Commercial Real Estate Stories for 2013

| January 6, 2014 | 0 Comments

What a year.  Here’s my take on the Top Commercial Real Estate stories for 2013 from the SF Peninsula:

Yeah, Google. Again: Cutting the largest lease deal on the Peninsula this year wasn’t enough. Google’s major land grab in Palo Alto turned heads too.  Seems our favorite local search engine behemoth was one of the biggest players nationally on the office leasing front.

Palo Alto Price per Pound: Rockwood Capital’s purchase of 130 Lytton Avenue in downtown Palo Alto was the most recent in a string of high profile building sales there at or near the $1000/square foot mark—a price per pound only barely flirted with during (and not seen since) the heady dot-com days. It won’t be the last.

Your Tax Dollars at Work: When the County of San Mateo purchased the 240,000 square foot Circle Star office complex in 2011, a lot of industry people (me included) were skeptical. Seems we were proven wrong. The County’s long term lease to Softbank was an absolute home run, and rumors have the building hitting the market for sale at twice the 2011 purchase price.

Muh-muh-muh-muh-muh-muh-muh-muh-Mailbu Grand Prix: The thing about land on the SF Peninsula—they aren’t making any more of it. The 20 acre Redwood City site that was formerly home to Malibu Grand Prix may be one of the best chunks left. The rumored $40/sf price may seem steep for unentitled dirt in a development hostile city, but Jay Paul rarely makes a bad bet.

New Development in the Research Park: The quarter-million plus square foot building at 1050 Page Mill in Stanford Research Park, vacant since Facebook’s relocation to Menlo Park, is a bit of an odd bird in the market— an unconventional manufacturing facility in a high-end R&D market. Sand Hill Properties purchase of the 13 and a half acre site certainly means an eventual big upgrade for a highly visible site within the Research Park.

Shovels in Downtown RWC: Sure, it was just a ground-breaking this year, and Crossing/900 won’t be online until 2015. But this is a big deal for a lot of reasons. The Hunter Storm/Kilroy venture is the strongest statement to date on the Peninsula showing the depth of the market shift towards transportation and amenity served office hubs. And spec development of this scale is a strong endorsement of the real estate market. Plus, the video is cool.

Bayshore Corporate Center: Cornerstone Properties came out of nowhere 20 some odd years ago to snap up what in retrospect was the deal of the decade. They bought a nondescript 340,000 sf Class ‘C’ (on a good day…) office project right smack at the hub of the Peninsula for a song. For years they kept the project pretty full with good management and maintenance, and by making it easy for brokers to place their small budget-conscious tenants there. The sale of this landmark is one of the best exits I’ve ever seen.

Old School: Elan Pharmaceuticals had barely moved out of BioMed Realty’s Science Center at Oyster Point following their lease buyout when Life Technologies stepped in with a new long term commitment on the 200,000 sf facility. Seems Life Science leasing still drives ‘the Industrial City’. BioMed Realty’s plans for the project suggest they agree.

EOP sells Downtown San Mateo asset: Not one of the biggest sales of the year by any stretch, but 400 El Camino Real in San Mateo is on a short list of premier buildings in that city’s downtown core. Its sale at an impressive price to a local investor affirms that San Mateo’s location along the CalTrain corridor bodes well for its long-term place in the market.

Roadblocks on El Camino: No shortage of major development projects along Menlo Park’s stretch of El Camino Real that have hit heavy resistance over the past few years. The joint Stanford University-Arrillaga project at 500 El Camino has carried on the pattern.

I’m sure I missed a couple of good ones– comment away…

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