Alaska Airlines May Dump Virgin’s Burlingame Office Space Following Merger

Woodmont Real Estate Services, Burlingame, Bay Area, San Francisco, Burlingame Bay, Virgin America

Woodmont Real Estate Services, Burlingame, Bay Area, San Francisco, Burlingame Bay, Virgin America

Seattle-based Alaska Airlines is moving forward with its merger with Burlingame-based Virgin America, which at its close may end putting the nearly 85,000 square feet back on the north Peninsula market. According to a report from the Puget Sound Business Journal, Alaska had already indicated that it will lay off 225 Virgin staff, but the final plans surrounding it’s office space have not yet been determined.

[contextly_sidebar id=”vcUXIzxrVnUxbNVK1WLuMjJ3YOriyLHY”]Virgin leases approximately 85,000 square feet near San Francisco International Airport at the Burlingame Bay office complex located at 555 Airport Road. Virgin also has the naming rights to the building, which is five stories tall and is visible from US Highway 101. The lease at Airport Road was initially signed in 2006, with additional space added consequently. That lease will expire in 2017, and according to the report the airline will have to provide 120-day notice to the landlord with a decision on the space.

H&Q Asia Pacific is a leading Asian private equity firm that has managed an aggregate of over $3.4 billion in committed capital through 28 funds since its inception in 1985, according to its Web site. The company purchased the Burlingame Bay office complex in September of 2015, when it paid $90 million for the the nearly 150,000 square foot complex, or roughly $608 per square foot, according to public records. H&Q has a local office in Silicon Valley at 228 Hamilton Avenue in Palo Alto. Its other offices are in Hong Kong, Taiwan, Shenzhen, Seoul and Shanghai.

“While we’re still working to identify exactly what our specific real estate needs are beyond (the takeover closing as expected in the fourth quarter), there’s no question we will continue to have a corporate presence in the Bay Area,” Virgin America spokeswoman Christie O’Toole said in a prepared statement.

According to a recent, second quarter of 2016 San Francisco Peninsula Research & Forecast Report by Colliers International, the Burlingame office market has approximately 7.31 percent vacancy of Class-A office space. This figure has not changed since the previous quarter, which in total amounts to roughly 58,000 square feet. The Virgin space would more than double that availability, although the quality of the asset, and its location on the San Francisco bay may attract interest from companies looking for extraordinary space facing the water and the airport.

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