Conveniently located between San Francisco and Silicon Valley, San Mateo is becoming a hot commodity for developers looking to create more housing on the Peninsula to accommodate the influx of families and young professionals in the housing-strapped region. The latest addition comes from Sierra Investments, a San Mateo-based commercial real estate investor who is proposing a mixed-use project with 48 residential rental units and a commercial office space located just down the block from San Mateo City Hall.
The investor, which acquired the Orchard Corporate Center in San Jose earlier this year, is working with Irvine, Calif.-based DNA Design and Architecture to realize its vision for this development. The plan was submitted at the end of August and is the latest to enter the San Mateo pipeline this year. It follows the 35-unit townhome development by Sares Regis, a 50,000 square foot mixed-use development on the edge of Hillsdale Shopping Center by Tang & Fang, Inc., and the conversion of an aging office park by Harvest Properties into a 291-unit mixed-use development. In addition, just last month, the coworking behemoth WeWork announced it would be opening a 37,000 square foot space in San Mateo.
Sierra Investments’ proposed project, located at 1919 O’Farrell Street, would consist of one and two-bedroom units featuring private balconies and an elevator, and a subterranean parking garage with 70 residential and 8 commercial parking spaces. Featured amenities would include a street-level fitness room, mail room, bicycle parking with storage for 196 bikes and a south-facing outdoor courtyard. Four of the units, or the state mandated 10 percent, would be affordable for low-income tenants. The project would also feature 2,665 square feet of street-level office space located closest to O’Farrell Street.
The architects hope that the new commercial space on the ground floor could become complementary to the residents and the neighborhood at large.
“It’s down the block from the City Hall and other businesses,” said Rocky Shen, Principal at DNA Design and Architecture. “So, it could house a business that’s complementary to civic use or other businesses.”
The existing one-story building and parking lot would need to be demolished. The project would neighbor two bigger residential complexes, both of which have an outdoor pool, as well as several office buildings, including one that houses the IRS as well as the San Mateo City Hall located further down the block. Lively downtown San Mateo is a 10-minute drive away.
“We think it’s a fantastic location for people who want to reside on the peninsula,” said Shen. “It’s within walking distance of shops, transit, employment, parks, and services. It’s close to city hall and local shopping centers. It’s at the end of a street, so there is less traffic.” It is, however, located right next to Highway 92, which connects Highways 280 and 101 and leads to the East Bay via the San Mateo Bridge.
“We’re mitigating that by orienting most of the units away from the north side,” said Shen. “We’ll also address the adjacency to the highway by a few design strategies.”
He explained that the proposed design includes smaller window openings, thickened walls, higher sound transmission windows and more solid balcony design on the highway-facing side of the building.
Once reviewed by the City of San Mateo, Sierra Investments would need to introduce the project to the neighborhood and undergo a hearing. Once approved, construction is estimated to take two years.
Sierra Investments’ project would add toward San Mateo County’s much needed housing stock. According to the second quarterly multifamily market report by Cushman & Wakefield, there are currently 2,461 units under construction as well as 6,404 units planned in the county. Though that number is much smaller than the neighboring San Francisco, where there are 40,524 units planned, San Mateo and its surrounding county seems to be keeping up with market demand.
The county recorded the largest year-over-year decrease in vacancy rates among Bay Area counties, going from 4.5 percent down to 4 percent. For comparison, San Francisco County’s rate is currently at 4.1 percent and the Bay Area average is 3.9 percent, the same as a year ago.Meanwhile, the average monthly rent in San Mateo County is currently $3,010, the second highest after San Francisco where the average rent is $3,489, according to Cushman & Wakefield’s latest report. The Bay Area’s average is $2,768, which has gone up 1.7 percent from a year ago. As the Bay Area’s population is expected to grow over the next three years, current projections for demand remain strong.
Meanwhile, the average monthly rent in San Mateo County is currently $3,010, the second highest after San Francisco where the average rent is $3,489, according to Cushman & Wakefield’s latest report. The Bay Area’s average is $2,768, which has gone up 1.7 percent from a year ago. As the Bay Area’s population is expected to grow over the next three years, current projections for demand remain strong.