By Jon Peterson
The new 305,000 square foot 400/450 Concar project in San Mateo broke ground recently, and the $180 million office development now has another partner attached to it. Along with Huston-based developer Hines and Chicago-based Pearlmark Real Estate Partners, New York-based Goldman Sachs just announced that it has joined the team, as well.[contextly_sidebar id=”uqrRFFj5nsHPriP2pZWlTlrWGBBvbvXl”]In addition to that, J.P. Morgan will be providing the construction loan on the development in the amount of $100 million, which covers around 56 percent of the development cost.
There are some extenuating circumstances that helped bring Goldman Sachs into the development.
“We had acquired the site in 2008 along with Pearlmark, which had invested in the project for one of its investment funds. Since then, this investment fund had pursued other investments, and so an additional capital source had to be brought into the project, and that is how Goldman Sachs got involved,” says Cameron Falconer, senior managing director for Hines. He works out of the company’s regional office in San Francisco.
Hines hired JLL to assist in finding a new investor and construction debt for the project. On the equity side Erik Doyle, managing director, and Will Connors, executive vice president, in the Menlo Park office, were involved. For the debt efforts, John Manning, managing director, and Alex Whitt, senior vice president, of the San Francisco office participated.
The demolition of the existing buildings on the site has already begun. The finishing date of the project is projected to be somewhere near the end of 2016. The project will have three buildings each around 100,000 square feet. The design of the project allows for either single or multi-tenants to occupy the properties.
“We think that the timing is very right for this kind of project. There is now very strong tenant demand in the region with not a lot of product for companies to choose from,” said Falconer.
The Concar project has been approved for a long time. This first happened in 2010 when the development group negotiated an eight-year development agreement with the city of San Mateo.