By Jon Peterson
Los Angeles-based Greenland USA is planning to start the 508,000 square foot first phase of Landing at Oyster Point office development in South San Francisco within the next six to 12 months. The development cost of the first phase is $300 million with the total cost of the entire project is $1.5 billion, according to sources with direct knowledge of the development.[contextly_sidebar id=”hEdn2sM2CiCuDZC1JkEcyPovlhOHS6ho”]“We are very excited to have a new owner of the Oyster Point project. We think this is a very exciting event for the city of South San Francisco,” says Mike Futrell, city manager for the city of South San Francisco. The municipality did approve the transfer of the development rights to Greenland this week. The previous owner of the project was with two San Francisco-based firms, Shorenstein Properties and SKS Partners.
Greenland provided the following statement for this story. “The city council’s approval to transfer the development rights for Oyster Point to Greenland USA brings us one step closer to becoming a part of the South San Francisco community. Greenland USA is committed to the long-term vitality of the communities in which we build, and we see tremendous opportunity to bolster the economic and social fabric of the area. We thank the City of South San Francisco for its on-going support and look forward to the next steps in this process.”
Oyster Point is a fully entitled development site that could support the development of 2.25 million square feet at full buildout. Life science tenants would seem to be the likely companies targeted for this project.
South San Francisco now has a total of 11 million square feet of life science real estate in its marketplace with no vacancy. There is a lot more space planned for development in the future. “In our market, there is six million square feet of additional projects coming down the road. This includes the Greenland project as well as developments planned by HCP and BioMed Realty,” said Futrell.
The Oyster Point project is one of three major developments that Greenland has going in the United States. The other two are located in Los Angeles and New York.
Shorenstein had initially acquired Oyster Point in 2008 for $84 million. The real estate manager had acquired a 97 percent interest in the 48.7-acre site for its commingled fund, Shorenstein Realty Investors Nine.
In October of last year, Shorenstein and SKS had decided to recapitalize the Oyster Point development. It was seeking new capital for the development in the range of $150 million to $200 million. The property owners at that time had hired the JLL Capital Markets team in San Francisco and Menlo Park offices for the assignment. The people involved were managing directors Michel Seifer, Rob Hielscher, Erik Doyle and Will Connors, as well as Erik Hanson, a vice president.