Kilroy Realty Corporation (KRC) announced July 8 that it has paid $78 million for one of the last fully entitled office development sites in San Francisco that is not yet leased. Located at 100 Hooper Street in the south of market area, the 3.3-acre site is fully designed and entitled for the development of a LEED Gold, low-rise, mixed-use creative campus that will consist of approximately 450,000 sq-ft.
The Hooper Street project features two large floor plate, concrete buildings totaling approximately 400,000 sq-ft. Kilroy says it will invest approximately $250 million incrementally on the development. The project will be approximately 80% office space and 20% PDR (production, distribution, and repair) space. KRC says it plans to commence construction at 100 Hooper later this year, subject to market conditions. Future design changes will be done in-house and a general contractor has yet to be selected.
By purchasing 100 Hooper, KRC now owns the last two remaining fully entitled office development sites in San Francisco that are not yet leased. Last month the company began construction on The Exchange at 16th in the Mission Bay submarket of San Francisco. This four-building project, which is targeting LEED Platinum, is still under design and is planned to include a green roof and ultra-low-flow toilets.
Both projects are well-positioned to take advantage of the strong tenant demand for new Class A creative space.
As part of the Hooper Street deal, the land will be sub-divided and about 50,000 sq-ft of additional stand-alone PDR space is expected to 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.
The Hooper site, adjacent to Showplace Square, is in close proximity to some of the nation’s premier companies and institutions, including California College of the Arts, the University of California, San Francisco, salesforce.com, Inc., Dolby Laboratories Inc., Airbnb Inc., Pinterest and Cisco Systems, Inc. Bounded by popular residential neighborhoods of the Dogpatch and Potrero Hill, the project will further benefit from the addition of San Francisco’s Central Subway system, currently under construction.
“The combination of manufacturing applications from the PDR space and innovation-oriented uses from the creative office space will not only create terrific synergies for the project but will also generate diverse jobs for the community," said John Kilroy, chairman, president and CEO of Kilroy Realty in a press release.
Michelle Ngo, senior vice president and treasurer for Kilroy, told me that the company currently has a portfolio of nearly 6,000,000 sq-ft of both stabilized properties and development projects in San Francisco and the Bay Area, with the San Francisco area making up 50 % of this figure.