By Nancy Amdur
A wave of new office and residential space is heading toward San Mateo with two significant development projects planned near the Hayward Park Caltrain station and other recently completed or in-the-works projects scattered nearby.
Essex Property Trust, Inc. spent $67 million this month to buy the 12-acre Station Park Green site from Philadelphia-based EBL&S Development LLC. The site, at Delaware Street and Concar Drive, is slated for an approximately $300 million four-building project comprising 599 residential units, more than two acres of parks and open space, 10,000 square feet of office and 25,000 square feet of retail space.
Residential units will range in size from a junior one bedroom to three bedrooms. Amenities at the property will include a 1-acre park at the center and several smaller parks throughout the property. A resident-only pool, fitness center and community and club rooms also will be provided.
Palo Alto-based Essex was drawn to the site in part due to its central location.
“It’s a core mid-peninsula location, and we’d been looking for a deal for quite some time between San Francisco and San Jose,” said John Eudy, the executive vice president of development for the residential real estate investment trust.
The transit-oriented development sits off Highways 92 and 101 and is adjacent to the Hayward Park Caltrain Station.
Essex eyed the Station Park Green site, which includes a now-shuttered Kmart, Michaels crafts store and gas station, since 2011, Eudy said, and went into contract for the property in 2013. Essex, which hired Irvine, Calif.-based architecture firm MVE + Partners to design the project, closed on the purchase this month. EBL&S Executive Vice President of Development Alan Talansky, who is based in San Mateo and has been working on the project for about eight years, will remain as a consultant on the project.
Essex looks to start construction on Station Park Green this summer, with completion expected in about three years, Eudy said.
Station Park Green will be across the street from Houston-based developer Hines’ nearly 300,000-square-foot office project at 400 and 450 Concar Drive, which recently began construction. The project will include 11,000 square feet of ground-floor space for pedestrian-oriented office, amenity or retail use.
“We always felt there would be a good synergy” with the Hines project, Talansky said, adding that the new residential, retail and office space will “upgrade that whole area of San Mateo and make it really special.”
“We think the whole area’s going to be transformed dramatically,” Eudy added.
The Hines and Essex developments—along with the Bay Meadows mixed-use community being developed by San Francisco-based Wilson Meany one mile south of these projects close to the Hillsdale Caltrain station—are part of a 10-year-old San Mateo rail corridor plan that the city created to encourage transit-oriented development within a half-mile radius of the Hillsdale and Hayward Park Caltrain stations.
“All of this [development] is bringing that corridor plan to fruition,” Talansky said.
Essex also plans a smaller San Mateo residential project on 1.2 acres across from Central Park at Fifth Avenue and San Mateo Drive. The planned 55-foot-high property, which will replace a surface parking lot, will comprise about 80 condominiums. It originally was planned as a 117-unit, 75-foot project but was scaled back after neighbors raised building height and traffic concerns, Eudy said.
Additionally, Essex recently completed its 190-unit Park 20 residential project at Elkhorn Court and West 20th Avenue in San Mateo, which Eudy said is now being leased. The property comprises studio, one- and two-bedroom units ranging from 492 to 1,042 square feet.
Other recent residential real estate activity near the Hayward Park and Hillsdale Caltrain stations includes Dallas-based apartment developer Wood Partners, LLC’s sale this month of a 111-unit multifamily community at 2089 Pacific Blvd. Land & Houses USA Inc., a subsidiary of Thailand-based Land & Houses Plc, purchased the property for $73.6 million, or $663,000 per unit.
The property was completed during the fourth quarter last year and features one-, two- and three-bedroom units averaging 970 square feet. Wood sold the property because it was a “compelling price from a credible buyer with a quick close,” said Brian Pianca, Wood Partners’ Mill Valley-based Northern California director. The company is “looking at a variety of opportunities” for other San Mateo or Peninsula projects, he added.
“Mode by Alta is the first 100-plus unit Class A asset to trade in the city in over 10 years,” said Stanford Jones, the executive vice president of investments at Institutional Property Advisors, a division of Marcus & Milichap Inc., in a news release. IPA advised Wood Partners in the sale.
“The inventory of luxury rental units in San Mateo is anemic, resulting in a severe supply/demand imbalance for high-wage earners seeking rental housing in the area,” Jones added. Jones did not return a request for further comment.
Other companies also are starting up construction projects in the city. New York-based Deutsche Asset & Wealth Management and Belmont, Calif.-based Embarcadero Capital Partners last month applied for building permits to move forward on an office expansion at the Clearview Business Park at 3000-3155 Clearview Way.
The companies spent about $125.5 million to purchase the 270,000-square-foot office park from Los Angeles-based Lowe Enterprises last year. Lowe secured city approval two years ago to replace a vacant 9,000-square-foot office building on the site with a three-story, 100,000-square-foot office building. The new property owners also submitted an application to add a sixth level of parking to the approved 666-space five-level parking garage, said Christine Usher, an associate planner in the city’s planning department. The office park’s tenants include solar power provider SolarCity and wearable camera company GoPro, Inc. Embarcadero Capital Partners did not return a request for comment.