By Meghan Hall
The COVID-19 pandemic has prompted developers to pause and rethink their development strategies, as the office market remains sluggish while other property types such as multifamily and industrial, continue to thrive. This was the case of Carmel Partners, who had originally planned to construct a mixed-use project at 1766 El Camino Real in Burlingame. However, those plans changed, and now Carmel is pursuing multifamily development at the site.
Carmel’s original project was approved by the Burlingame City Council in November of 2022. At the time, the developer had planned to build a mixed-use office and retail building, plus 60 residential units on the 1.7-acre site. The new project, however, is entirely residential.
New plans show that the project will now be an eight-story multifamily building with 311 residential units. Units will be a mix of studios, one-, two- and three-bedrooms ranging in size from about 611 square feet to more than 1,500 square feet. Twenty-two of the units would be reserved for very-low income households making about 50 percent of Area Median Income (AMI). Nearly 26,000 square feet of open space, as well as parking, is also planned.
The building, designed by Oakland-based TCA Architects, will be clad in a mixture of brick veneer, metal panels, composite wood and stucco of varying colors. At the end of March, the project underwent design review. Timing for the project is unclear. However, City documents indicate that a Planning Commission meeting could be scheduled as soon as this summer.
The decision to change course could be a smart move for Carmel, as urban office markets around the country continue to lag behind other property types. A first quarter report recently released by Kidder Mathews notes that while there has been a slight uptick in demand for office during the first quarter of the year, “it is still too soon to see any tangible trends of the office market returning to the height it once had prior to the pandemic.” By the end of the first quarter, office vacancy on the Peninsula, where Burlingame is located, sat at about 11.6 percent.
Multifamily, by many accounts, continues to thrive and surpass expectations. Collies, who released a Northwest multifamily report in March, stated that the sector “registered unparalleled levels of sales volume in 2021,” finishing 74 percent above the previous 2019 record at $335 billion. In recent months, national apartment demand was more than double the annual average of the previous decade and occupancy rose to 97.5 percent. With the future of office uncertain, these fundamentals have become more than enough to persuade developers such as Carmel Partners to alter course.
As of this writing, Carmel Partners had not yet returned The Registry’s request for comment.