Office Development Remains Strong Across the Bay

The San Francisco-Peninsula market had 5.2 million square feet of office space under construction as of February, CommercialEdge data shows. The figure represented 3.3 percent of total stock, 110 basis points above the national figure. No new office properties were added to the pipeline in February.

Although the rate of construction decreased since last year—5.1 percent of total stock was underway in February 2021—the metro follows national trends. Across the U.S., the amount of new space underway decreased by about 10 million square feet over the last six months, as pandemic-induced headwinds slowed and allowed developments to continue without delay. Life science development continued to be a dominant aspect of the office pipeline across the Bay.

A single office property was completed in February, according to CommercialEdge. In San Mateo, Windy Hill Property Ventures completed its development of Parallel on Third—a 116,000-square foot Class A office building which also includes a multifamily component. CBRE acts as leasing manager for the property.

The San Mateo submarket had more than 560,000 square feet of office space underway in February. One large project nearing completion is Bay Meadows, a two-building, 438,000-square-foot office campus developed by Stockbridge Capital Group.

South San Francisco had more than 2 million square feet of space under construction, the most out of all Peninsula submarkets. Other areas that recorded significant development activity included Brisbane (977,000 square feet underway), SoMa (683,000 square feet) and Menlo Park (213,000 square feet).

Bay Area Office Development Increases

Across the Bay Area—comprising the East and South Bay—office construction activity increased. As of February, the market had 6.2 million square feet under construction, or 3.1 percent of total stock—an uptick of 40 basis points year-over-year.

Large tech campuses and life science projects made up most of the pipeline on this side of the Bay as well. In downtown San Jose, Boston Properties announced it will resume work on Platform 16, a 390,000-square-foot creative office campus, slated for delivery in 2024.

One of the largest office developments to break ground earlier this year was Triad Development’s Ascend @ Lagoon Valley, in the Vacaville submarket. Construction started in January and the developer aims to transform 50 acres into Class A office (roughly 700,000 square feet), research & development and biomanufacturing space across several buildings.

CommercialEdge covers 8M+ property records in the United States. View the latest CommercialEdge national monthly office report here.