By Scott Baltic, Contributing Editor
Hines, along with capital partner Pearlmark Real Estate Partners, of Chicago, broke ground Tuesday on 400|450 Concar, a 305,000-square-foot Class A office complex in San Mateo, Calif.
As reported by Commercial Property Executive last month, Goldman Sachs is also a partner in the project’s capitalization, and JPMorgan is supplying construction funding. The building’s dollar value has not been disclosed.
The building was designed by Form4 Architecture, of San Francisco, to deliver as a LEED pre-certified Platinum property. The 3.3-acre site, which Hines and Pearlmark bought in 2008, is adjacent to the Hayward Park Caltrain station in an area rezoned by the City of San Mateo to encourage transit-oriented development.
“San Mateo has limited supply of Class A office space, and we are excited to develop more than 300,000 square feet of contiguous office space in a single urban-campus environment,” Hines senior managing director Cameron Falconer said in a release.
Construction is scheduled for completion in the fourth quarter of 2016.
There has as of yet been no preleasing on the building, a Hines spokesperson told CPE, noting however that the company is “seeing demand from a variety of tenants, including tech, media, life sciences, etc.”
“Strong tenant demand is driving major speculative development for the first time” in San Mateo County, according to a first-quarter report from Kidder Mathews, while many developments are seeing “significant preleasing activity.”
The office market in the City of San Mateo is running at an 11.8 percent vacancy on an inventory of 7.55 million square feet and had slight negative net absorption in the first quarter. That said, the report continues, San Mateo County added 16,200 jobs (heavily represented in software development) in the first quarter and currently has the lowest county-wide unemployment rate in California.