By Meghan Hall
Now nearly two years in the works, plans for the second phase of University Circle, a six-story, 180,000 square foot project, are moving forward. At the beginning of December, the City of East Palo Alto formally published the project’s draft environmental impact report (EIR), marking a major milestone in the entitlements process.
Located at 1950-2050 University Avenue, the project was first pitched in December of 2019 by Seven Bridges Properties on behalf of Columbia Realty Trust. The project team intends to redevelop an 11.84 acre site in the western portion of East Palo Alto. Currently, the property–historically known as Whiskey Gulch for its high number of liquor stores post-prohibition–is developed with three Class A office buildings totaling 451,000 square feet, a Four Seasons hotel, a parking garage, surface parking and landscaping.
Seven Bridges and Columbia intend to redevelop the existing 97,659 square foot surface parking lot, which is located at the southern portion of the site. In addition to six stories of office, three levels of below-grade parking would also be provided. The ground level of the new building would include an entry lobby, men’s and women’s bathrooms with showers, tenant office space and 2,940 square feet of indoor community space, according to project documents. A 1,000 square foot community patio is also designated in the plans. The upper five floors would be designated as office space for commercial tenants.
Along with the Final EIR, a number of other discretionary approvals would need to be procured, including a development agreement, lot merger, and development and building permits, among others. The project would be built out in a single phase and would take about 36 months to complete.
Once completed, the building would add to the greater University Circle campus, which Colubmia bills as “one of the premier office addresses in Silicon Valley. Amenities include onsite restaurants, weekly farmers’s market, free shuttles and onsite management. Tenants also have access to new outdoor seating and fireplace, a cocktail reception area and barbecue pit.
“University Circle provides offices for many leading tech companies and some of the most prestigious law firms in the Silicon Valley office,” states the property’s landing page. “Designed by Hoover Associates, the classically-styled office buildings feature Brazilian granite and Italian limestone exteriors and curve around dramatic courtyard fountains.”
Currently, the website lists 10 suites, totaling 169,507 square feet of space, as available for lease or long-term growth options. Leasing documents indicate that the spaces have been recently upgraded. However, it is unclear whether or not the property’s current availability will impact construction of its expansion.
According to Columbia’s most recent investor report, 94 percent of the company’s office portfolio is leased. The firm currently owns locations in San Francisco, New York City, Boston, Washington D.C. and Jersey City, N.J. Its San Francisco portfolio is listed as one of its “leading gateway markets”; there, the company owns 2.2 million square feet of space.
Across its portfolio, the company has an average remaining lease term of about 5.9 years, with just 7 percent of its leases rolling in 2022. Most of the company’s leases–28 percent–are expected to roll around or after 2030. Through 2020 and 2021, Columbia collected between 98 to 99 percent of its office rents. Currently, Columbia has $4.1 billion in unencumbered assets, which represents about 88 percent of its total portfolio. The company also posted nine percent same-store NOI growth during 2020, and its growth real estate assets total more than $4.6 billion.