By Meghan Hall
A number of commercial real estate trends that began during the pandemic are clearly continuing into 2022, including developer interest in converting industrial property into lab space. In a recent transaction that highlights this trend, Lane Partners has acquired a multi-tenant industrial facility in South San Francisco for $22 million. According to sources familiar with the deal, the seller was a private ownership group.
The property is located at 275 S. Maple St. and totals 70,000 square feet. Public records indicate that the Class B building was constructed in 1974 and sits on about 2.82 acres. 275 S. Maple is in a highly commercial part of town, neighbored by Watchpoint Logistics, Spiro Technology System, a Stitch Fix Warehouse and other retail and distribution-related businesses. The asset is also minutes from the confluence of Interstate 380 and Routes 82 and 101.
“This disposition enabled ownership to maximize the current value of their asset, encumbered by long-term, well below market rents, while the buyer, Lane Partners was able to expand their large life science development assemblage in South San Francisco,” said Mike Davis, executive vice president at Colliers, who worked to broker the deal.
Davis also worked with Colliers’ Nick Mascheroni, Mark Maguire and Justin Smutko to represent the seller. Newmark’s Dan Matteucci and Ben Stern represented Lane Partners.
According to Colliers, the property will be redeveloped into life sciences uses. Lane Partners, which was founded in 2006, has focused on acquiring, developing and managing institutional real estate throughout the region. Currently, it has more than nine million square feet as part of its portfolio, including several heavy-hitting projects such as Southline, a two million square foot project also in South San Francisco, and Eastline, a mixed-use project in Oakland that could bring up to 1.6 million square feet of office, retail and community space to the neighborhood.
It is unclear what specific plans Lane Partners has for the redevelopment of 275 S. Maple St. Currently, the City of South San Francisco Planning Department has no plans related to the property’s development.
The San Francisco Peninsula is the largest life sciences cluster across Northern California and the Pacific Northwest, according to a recent Q4 report by Colliers. In all, there is currently 16,314,111 square feet of life sciences inventory. The Peninsula has an additional 15 million square feet of proposed life sciences development in the pipeline, as well as another 3.7 million square feet under construction. About 1.15 million square feet has been pre-leased.
The surge in development has been met by continual demand from tenants, who are growing at a rapid pace. Currently, the South San Francisco Peninsula has 410,000 square feet of active tenant requirements; nearby Silicon Valley has more than 1.7 million. Colliers estimates that the number of tenants in the region has increased by 25 percent, and tenants are requiring about 7.4 percent more square footage, meaning that demand for life sciences space is expected to continue.
As of this writing, Colliers had not yet returned The Registry’s request for comment.