By Meghan Hall
The El Camino Real, a major transportation thoroughfare that spans the Peninsula from San Francisco to San Jose, has produced a corridor of development along its route. The result is an influx of new proposed office and mixed-use development within the Peninsula’s smaller cities such as San Mateo. San Jose, Calif.-based Arc Tec Inc. has proposed the construction of an 18,421 square foot office building at 2 W. Third Ave. just outside of San Mateo’s downtown. The development team submitted a pre-application for the site in April of this year.
According to project documents, the owner of the property is 230 El Camino, LLC. based in Burlingame, Calif.
Project plans indicate that the existing 11,464 square foot lot is currently undeveloped; the site sits just on the other side of El Camino Real from downtown and is across the street from the Bank of America Financial Center and the San Mateo Public Library. Numerous eateries such as Three Craft Kitchen and Bar, Starbucks and Kaffeehause are all within walking distance, as is San Mateo’s Central Park and Equinox San Mateo, a high-end fitness center.
The office will rise three stories in height and will be modern in its design. Project documents indicate that the exterior of the building will be clad in a mix of brick veneer and smooth plaster. Aluminum composite canopies and steel canopies with wood infill will be added to provide visual interest to the exterior building, which also features large windows. No parking will be provided on site, as the development team has chosen to pay in-lieu fees instead.
According to the City of San Mateo’s website, there are currently 44 projects in the development pipeline in San Mateo. The projects range from those in the pre-application phase to those currently under construction. Nine of those projects are concentrated in and around San Mateo’s growing downtown. Windy Hill Property Ventures recently broke ground on its 65,625 square foot office building located at 405 E. 4th Ave., while Trans World Assurance Co. has received approval to construct a 33,500 square foot, four-story office building at 885 S. El Camino Real.
High tenant demand will continue to spur development as the year-over-year employment rate fell to 2.8 percent from 3 percent, states Cushman & Wakefield in its First Quarter San Mateo County Office and R&D Report. While Cushman & Wakefield notes that full building opportunities are beginning to come online, there has been an equal amount of new deals and expansion activity to keep up with the delivery of new projects. 87.1 percent of all newly developed space in San Mateo County was pre-leased upon completion, and it is a rare occurrence when buildings do not capture any pre-leasing. In those instances, however, Cushman and Wakefield states that vacant space was filled within about 90 days of delivery.
Notable leases in San Mateo during the first quarter of the year include Snowflake’s at new lease in San Mateo, where the technology company took 210,000 square feet of space across two buildings at 450 Concar Dr. in April.
Vacancy across San Mateo County dropped to 8.2 percent, and Cushman & Wakefield is currently tracking nearly three million square feet of active tenant requirements for office and R&D uses. The number of listings across the county dropped by 6.7 percent since the fourth quarter of 2018. However, of the 502 listings on the market, just 77 were for spaces between 10,000 and 20,000 square feet.
Arc Tec Inc. declined to comment on behalf of the property owner, who could not be reached for comment.