$450 Million Mid-Rise Office Project in San Francisco's Mission Bay Expected to Break Ground Next Year
Kilroy Realty Corp. (NYSE: KRC
) remains on fire with its West Coast acquisition and development activities, disclosing the $95 million purchase of a high-profile development site in San Francisco’s Mission Bay neighborhood, along with plans to start a 680,000-square-foot mid-rise office campus next year.
The 3.1-acre site just south of the SOMA (South of Market Area) and along the 16th Street corridor near I-280 is development-ready and expected to be in high demand for millennial-inhabited neighborhoods such of Potrero Hill, the Mission District and Dogpatch.
"We believe our Kilroy Mission Bay office campus responds to a shortage of the collaborative space that is most in demand in San Francisco and will quickly attract many of the city’s most dynamic companies and their young, urban-oriented workers," said John Kilroy, Jr, chairman, president and CEO.
Kilroy didn't break stride in its development pipeline in the first quarter and well into the second quarter. The company continued construction on six ongoing development projects totaling 2.5 million square feet in early 2014, four of which are 100% pre-leased. The company estimates its total investment will be about $1.5 billion in those projects, with completions ranging from this year to 2016.
"Our West Coast real estate markets continue to improve, led by remarkably strong demand for contemporary workspace in the San Francisco Bay Area and greater Seattle," John Kilroy, Jr. said in a recent earnings call with investors.
The new site and $450 million development project is near AT&T Park, home of the Giants, and has been picked by the Golden State Warriors as the location for the basketball team’s new 18,000-seat arena.
Kilroy is likely to build the mid-rise office campus in two phases, with first activity expected to begin in early 2015. The LEED-Gold designed project will include two six-story and two 12-story office buildings. In addition to large floor plates and high ceilings, the design also includes outdoor decks and other collaborative gathering places.
In addition to the new campus of the University of California, San Francisco, UCSF Mission Bay, the neighborhood will be home to more than 6,000 residences, 4.4 million square feet of office, research and biotechnology facilities and 280,000 square feet of retail on projects under construction or planned.