Kilroy Realty plans major office development in Mission Bay

Maybe it is the attraction of having the Golden State Warriors as a future neighbor, but commercial real estate in Mission Bay is suddenly as hot as Stephen Curry on a shooting streak.
Kilroy Realty Corp., which is already building new homes South of Market for Salesforce.com and Dropbox, has shelled out $95 million for a 3.1-acre site in Mission Bay, the 300-acre, burgeoning biotech, medical and tech-centric neighborhood springing up on former Union Pacific rail yards south of AT&T Park.
The project is the largest remaining commercial development opportunity in the neighborhood and will allow Kilroy to build a 680,000-square-foot campus. The entire project, including the land purchase, will cost $450 million.

Warriors' land deal

The deal comes two months after the Warriors said they had purchased a 12-acre Mission Bay site and would construct a 18,000-seat basketball arena in the neighborhood. The seller was Salesforce, which had originally planned to build a 2 million-square-foot campus there, but ultimately decided to expand in the south Financial District.
The Warriors' announcement, while cheered by activists who were opposed to a previous arena plan for Piers 30-32, essentially took 1.6 million square feet out of Mission Bay's development pipeline. The last remaining parcel in the neighborhood is the final piece of the Salesforce property, which is entitled for 450,000 square feet of office space. That property is being marketed by CBRE, which handled the Kilroy deal and will almost certainly sell this summer.
Company CEO John Kilroy Jr. called Mission Bay "San Francisco's most popular new live-work-play neighborhood."
The site sits at the southwestern edge of Mission Bay, to the west of UCSF's $1.6 billion hospital, which will open in 2015. While the land is removed from the waterfront, Kilroy officials said its proximity to the Mission and Potrero Hill would make it attractive to the young tech workers residing in those neighborhoods. The parcel, known as Block 40, borders 16th Street, which connects Mission Bay to those neighborhoods.

Steven Johnson, who lives in the Mission Bay neighborhood, walks along Fourth Street as he carries his dog Lena, as they walk past signage on a storefront for The Market Hall on Friday, May 23, 2014 in San Francisco, Calif. Photo: Lea Suzuki, The Chronicle

2 phases of work

The price translates to $140 per buildable square foot, which exceeds what Kilroy paid for its two other development sites. A property at 350 Mission St., the future Salesforce building at the Transbay Terminal, cost $130 per buildable square foot. The site at 333 Brannan St., which Dropbox had preleased, cost $120 per buildable square foot.
The project will be built in two phases, with the first phase of construction expected to begin early next year. The LEED-Gold designed project will include two six-story and two 12-story office buildings.
Kilroy, while based in Los Angeles, has been San Francisco's most aggressive office developer since 2010, when it bought 303 Second St., formerly known as Marathon Plaza. Kilroy also owns 100 First St. and 370 Third St.

Pierre LeDuc, Bimma Loft creative director, stands in his store which is on the ground floor of a building across from the the Mission Bay construction project which burned in a fire on Friday, May 23, 2014 in San Francisco, Calif. Bimma Loft opened it's store on March 10, 2014 and the fire occurred the next day on March 11, 2014. Photo: Lea Suzuki, The Chronicle

Article and Photos Sourced From:  http://www.sfgate.com/bayarea/article/Major-development-deal-for-Mission-Bay-in-SF-5523124.php