By Cory Weinberg: Reporter San Francisco Business Times
Kilroy Realty Corp. might get to call “bingo” in a game to collect sites in all of San Francisco’s major areas of office development.
The publicly traded real estate investment trust paid $78 million for the approved office industrial development site at 100 Hooper, a project with 450,000 square feet of space next to Showplace Square, where SoMa meets Potrero Hill. The seller was San Francisco-based UrbanGreen Devco.
Kilroy (NYSE: KRC) has already funneled dollars into office sites in Mission Bay, the South Financial District and Central SoMa in just the last few years.
Together with its Exchange on 16th office project in Mission Bay, Kilroy will get to work on finding companies to fill the last two remaining fully entitled office sites in San Francisco that aren’t yet leased. Kilroy expects to start construction on the project this year.
“The demand (from office tenants) is moving south in the city. SoMa is filled up now and Mission Bay is basically filled out now. There aren’t a lot of large opportunities available,” Mike Sanford, Kilroy’s Northern California executive vice president, told the Business Times.
This part of the city – west of Mission Bay and east Potrero Hill, squeezed between the 280 and 101 freeways – is about to pop with change, even if it’s so far gone more unnoticed than other office submarkets.
The site is next to several large residential projects that are starting construction, such as Equity Residential’s 900 units in the Design District. The homes of California College of Arts and Dolby Laboratories are nearby. Payments startup Stripe just leased 300,000 square feet a few blocks away.
“When I was driving from SoMa to Mission Bay, I would drive along 7th Street. I started to notice what was going on over there,” Sanford said.
The project is also significant because it will reserve about 20 percent of the space, or 50,000 square feet, for manufacturing and industrial companies that employ lower-to-middle-wage workers and can’t afford expensive space. That space will be owned and managed by PlaceMade, a non-profit subsidiary of SFMade that focuses on providing affordable space for manufacturers and other related industrial users in San Francisco.
That will also make the project even more appealing to potential tenants, Sanford said.
“The collaboration between manufacturing companies and technologies companies make it an incubator. It’s just like what we’re seeing with tech and life sciences in Mission Bay,” he said.
Pfau Long Architecture as been working on the building’s design and brokerage Collier’s International on the building’s office lease.
TRI Commercial 