The Peninsula R&D market finished strong with a number of transactions completed for the third quarter of 2014. The vacancy rate remains low with the quarter closing at 7.9%, a decrease of 2.1% compared to the previous quarter. Direct available space remains remarkably low at 7.4%, which led to the decrease in vacancy throughout the Peninsula market. Foster City and Redwood Shores at 2.8%, saw the biggest decrease in total vacancy where as Redwood City saw the biggest increase at 14.5%.
The level of activity increased with significant transactions continuing a trend seen throughout the previous year. The Menlo Park submarket ended the quarter with the highest net absorption, 27,033 square feet, followed by Foster City/Redwood Shores with 15,256 square feet of net absorption. Redwood City ended the quarter with 27,492 square feet of negative net absorption.
The average asking rental rate for the Peninsula R&D market has remained the highest since 2006, increasing $0.12 to $1.76 per square foot, NNN. The third quarter ended with 12,275 square feet of positive net absorption. The quarter’s most notable lease transactions were Madarex’s renewal of 133,123 square feet at 700 Bay Road in Redwood City and Onyx Pharmaceutical’s relocation to 269 East Grand Avenue in South San Francisco of 107,000 square feet.
Notable Lease TRANSACTIONS
- Medarex: 700 Bay Road, Redwood City 133,123 SF (Renewal)
- Onyx Pharmaceuticals: 269 E Grand Avenue, South San Francisco – 107,000 SF (Relocation)
- Solazyme: 201/225 Gateway Boulevard, South San Francisco – 106,076 SF (Renewal/Expansion)
- Rinat/Pfizer: 230 East Grand Avenue, South San Francisco – 106,000 SF (Renewal)
- Bristol Myers Squibb: 740 Bay Road, South San Francisco – 60,984 SF (Relocation)
- Crescendo: 347 Oyster Point Boulevard, South San Francisco – 53,980 SF (Renewal)
- Alios Biopharma: 260 E Grand Avenue, South San Francisco – 48,016 SF (Relocation)
For more information contact: Reed Payne, Executive Vice President, Brokerage 408.970.9400