By Meghan Hall
South San Francisco has become a major hub for pharmaceutical and life sciences companies with its location between San Francisco and Silicon Valley. Companies are both building and leasing, and a rare parcel of land in the midst of it all has hit the market. According to a property flyer, 3.7 acres — the equivalent of nearly 162,000 square feet — at 1 Gull Drive have been posted for sale. Guidance pricing for the property, according to sources, is about $14.9 million.
The property, known as Parcel 2B, includes between 2.6 to 2.7 acres of level ground and is zoned for a business or technology park. The brochure touts that the property has easy access to San Francisco International, nearby freeways, and boasts views of the Bay. However, the property’s most important feature is its location.
The lot is not far from several hugely influential developments in South San Francisco. UPS’ South San Francisco hub on Forbes Boulevard is located just across the street from the property. Along Oyster Point Boulevard, is Kilroy Realty’s Oyster Point project, a 2.5 million square foot development slated to be completed in the second half of 2021. As of October of 2019, Phase I of the development — totaling 656,000 square feet — was entirely leased. Much of that space was leased by Stripe, who signed a 12-year lease for 421,000 square feet of space. Stripe, known as the second-most valuable start up in the United States and valued at about $35 billion, plans to transfer 1,000 employees to Oyster Point.
Also nearby is HCP’s The Cove, which totals one million square feet and consists of seven buildings ranging from 115,000 to 182,000 square feet. The development also includes an upscale hotel, 20,000 square feet of retail and an amenities center. Current tenants include Five Prime Therapeutics, AstraZeneca, CytomX Therapeutics, Global Blood Therapeutics and Alector.
BioMed Realty’s Gateway of Pacific is also in the works; the three-phase 1.3 million square foot office campus has landed several big-name tenants, including AbbVie, a leading biopharmaceutical company who took 509,000 square feet of Phase I. In December of 2019, Amgen signed a long-term lease for 240,000 square feet.
The San Francisco Peninsula boasts strong fundamentals. According to a CBRE Peninsula Market Report—the most recent available—the San Francisco Peninsula market continues to excel in many fundamental areas. Vacancy continued to drop during the fourth quarter, reaching 6.6 percent, and the market experienced positive net absorption of 147,445 square feet. CBRE notes that these changes are often due to tech tenants attempting to get closer to their employees.
“As technology tenants flood the San Francisco Peninsula market and continue to place a greater importance on cutting commute times for their employees and to be a short walk from amenity rich areas, the demand for transit oriented, downtown cores has grown rapidly,” states CBRE in its report. “[As a result,] many owners and developers are viewing this trend as a chance to lease space to high quality tenants and push market rents.”
CBRE Senior Vice Presidents David Black and Marshall Hydorn have been hired to market the property for sale. As of this writing, CBRE had not yet returned The Registry’s request for comment.