The site of one of Northern California’s largest produce terminals is up for sale as a life-science redevelopment opportunity

The site of the Golden Gate Produce Market in South San Francisco, which touts itself as one of Northern California’s largest and busiest produce terminals, is up for sale and being marketed as a large life-science redevelopment opportunity.

Kidder Mathews, a commercial brokerage firm, is marketing about 26.4 acres of land comprised of the entire terminal site and a portion of an adjacent parking lot as a 1.1-million-square-foot life-science redevelopment opportunity, according to a copy of an offering memorandum viewed by the San Francisco Business Times. The memorandum did not include an asking price, the Business Times reported.

The entire site sits two miles north of San Francisco International Airport, and its eastern edge borders Highway 101. Mark Melbye, an executive vice president at Kidder Mathews, is handling the listing on behalf of Golden Gate Produce Terminal Ltd., a California limited partnership and the terminal property’s owner, according to the Business Times.

Neither Melbye nor Peter Carcione, who listed himself as the limited partnership’s president in documents filed with the California Secretary of State’s office in 2015, responded to a request for comment.

Some 400 tenants on short-term leases occupy space in the Golden Gate Produce Market at 131 Terminal Court and on the surface parking lot next door, at 101 Terminal Court, the Business Times reported. Any potential buyer of an 8.7-acre portion of the parking lot and the market site — which totals about 17.7 acres — would be required to fund the design and construction of a new, state-of-the-art produce terminal, the report said.

The owners of the existing terminal envision the new market, which would be located in a 150,000-square-foot building, taking up roughly eight acres of the approximately 10-acre parking lot, the report said. It’s unclear whether Park ‘N Fly, the lot’s owner, is partnering with the terminal’s owners to market both the 8.7-acre portion of its property and the market site for sale. A representative for the parking company did not respond to a request for comment.

It’s also unclear if any tenants within the existing market, which is located in a 742,000-square-foot facility, would be displaced if a prospective buyer plans to demolish it. The market, which completed an extensive renovation in 2017, employed 475 people and moved more than 15 million packages annually as of October 2017. The offering memorandum stipulates that all tenants must be able to reoccupy the new terminal before the existing facility can be razed, the Business Times reported. However, at 150,000 square feet in size, that replacement space is nearly five times smaller than the current market.

What is clear, though, is that the market for life-science space in and around South San Francisco is sizzling right now. Life-science activity continues to be strong in San Mateo County, which includes South San Francisco, according to Kidder Mathews’ latest Bay Area life-science report.

Vacancy rates for that type of space in San Mateo County dropped to 3.07 percent from 4.52 percent from the first quarter to the second, the report said. Moreover, the area’s life-science market saw nearly 297,000 square feet of positive net absorption during the second quarter, according to Kidder Mathews data.

From a developer’s standpoint, South San Francisco is an ideal place to build more than one million square feet of new life-science space. The city is already home to more than 200 biotech companies and 11.5 million square feet of biotech space, making it the largest biotech cluster in the world. The vacancy rate for biotech space in some of the sector’s Bay Area hotspots, like from South San Francisco to Emeryville in the East Bay, was effectively zero as of late last year, according to Business Times data.

[San Francisco Business Times] — Matthew Niksa