Nine months after acquiring the 32,400-square-foot property at 1155 Bryant Street in San Francisco, Paceline Investors and Rialto Capital Management have leased the full building to innovative laboratory meat manufacturer Mission Barns.
The property was purchased by the two companies in October of 2020 for $18.3 million, or just around $564 per square foot, according to earlier reporting by The Registry. The seller was an entity associated with Robert Mellett of Mill Valley, Calif.
1155 Bryant is a production, repair and distribution (PDR) property that is located in San Francisco’s South of Market (SoMa) district. It had been recently renovated with a fully built out R&D laboratory and creative office component. “1155 Bryant is an outstanding renovated building with a significant lab buildout which is very rare in San Francisco,” said Jay Atkinson, Managing Principal at Paceline Investors at the time of the acquisition. “Demand for both lab and R&D space in San Francisco remains strong, and we anticipate a very positive reaction to the building by the tenant community.”
Located at Bryant and 10th Streets, the property occupies a prime SoMa location that is in proximity to amenities and features excellent freeway access. Additionally, the building has high ceilings with skylights, a passenger elevator and I-80 Freeway signage visibility.
The sale of the property was arranged by the San Francisco office of Newmark. Executive Managing Directors Mark Geisreiter and Charlie Withers represented Paceline Investors and Rialto Capital Management in the transaction. Geisreiter and Withers also led the leasing efforts on behalf of the new ownership.
The San Francisco PDR market’s overall vacancy rate rose 160 basis points in 20Q2 to 4.8 percent, according to NKF Research. Asking rents decreased 2.5 percent in Q2, averaging $61.57 per square foot. Demand for high-quality PDR space remains healthy despite uncertainties in the overall market, according to the report.
This lease comes on the heels of another food-related innovation company growing in the region. In March of 2021, San Francisco-based Eat Just, which specializes in producing plant-based alternatives to egg products, had signed a 117,000 square foot lease at the Research Park at Marina Village in Alameda. The property is owned by DRA Advisors and Blue Rise Ventures and is part of a larger 1.4 million square foot waterfront campus. The research park is home to more than 400,000 square feet and 25 different life sciences companies and research tenants.
Food companies such as these are emerging as a robust innovation cluster within the life science sector of the commercial real estate industry in the region. They add another dimension of creative enterprises created across the broader Bay Area whose initiatives are looking to transform industries globally.