Facebook Leases 800 KSF Bay Area Office Project
- Jan 17, 2019
Kylli Inc., developer of the Burlingame Point office campus in the San Francisco suburb of Burlingame, Calif., has landed a tenant for the 803,000-square-foot project. Facebook preleased the property in its entirety.
Designed by Gensler, Burlingame Point will encompass four Class A buildings ranging in size from approximately 155,500 to 245,000 square feet on an 18-acre site along San Francisco Bay in San Mateo County. A San Francisco-based subsidiary of China’s Genzon Investment Group Co., Kylli broke ground on the development in 2017, and in August 2018 the company began lease negotiations with Facebook. The transaction closed in the fourth quarter of 2018. Kylli expects to complete the project in 2020, with construction being led by general contractor Hathaway Dinwiddie.
Cushman & Wakefield represented Kylli in the Facebook transaction, and JLL stood in for the tech giant.
“This addition diversifies the Facebook real estate footprint within the Bay Area, where they have been rapidly expanding near their headquarters location in Menlo Park as well as East Bay and San Francisco locations,” Clarke Funkhouser, executive director with Cushman & Wakefield, told Commercial Property Executive. Funkhouser was joined by colleague Mike Moran, an executive managing director with the firm.
Big tenants, big demand
Facebook’s all-in commitment to Burlingame Point marks one of the largest lease transactions ever seen on the San Francisco Peninsula. “The Facebook transaction further validates the San Francisco Peninsula as a primary market across industry sectors. Strong demand for new construction from technology and life science users has been evidenced by surging growth from large users such as AbbVie, Genentech, Google/Youtube and Walmart,” Funkhouser said.
The ongoing cry for premier office accommodations has resulted in record-breaking preleasing activity in San Mateo County, where deals totaling roughly 1.6 million square feet of office and R&D projects closed in the fourth quarter alone, according to a Cushman & Wakefield report.
Early commitments included AbbVie’s agreement to take 550,000 square feet at BioMed Realty’s Gateway of Pacific project in South San Francisco. Global Blood Therapeutics signed a 165,000-square-foot deal at The Cove at Oyster Point, HCP’s multi-phase development in South San Francisco. Since 2012, approximately 90 percent of all completed office projects in San Mateo County have been able to achieve some level of preleasing.
“Such growth and demand also suggests that the San Francisco market is in need of additional commercial development, especially large-scale projects, to accommodate migrating and expanding companies particularly in these [tech and life science] industries,” Moran told CPE. “Scale and growth management are critical to the current corporate user.”
Image courtesy of Kylli Inc.