SteelWave pays $85M for South SF parking lot

Site next to produce market that’s for sale as potential 1.1M sf life science play

San Francisco /
May.May 13, 2022 02:40 PM
SteelWave’s Steve Dunn and 101 Terminal Court (LinkedIn, Google Maps)
SteelWave’s Steve Dunn and 101 Terminal Court (LinkedIn, Google Maps)

The same developer that wants to turn a shuttered strip mall in South San Francisco into a mixed-use development with office, research and retail uses has spent $85 million to purchase another property in the city.

SteelWave is the new owner of a 10-acre surface parking lot at 101 Terminal Court. The property is adjacent to the Golden Gate Produce Market, which touts itself as one of Northern California’s largest and busiest.

The seller was Park ‘N Fly, an off-airport parking company based in Atlanta.

The deal was recorded with the San Mateo County Clerk-Recorder’s Office on May 5.

It’s unclear what San Mateo-based SteelWave’s plans are for the 1,840-space lot, since neither the firm, Park ‘N Fly nor Kidder Mathews’ Mark Melbye, who marketed the site for sale, responded to requests for comment. There are no plans on file with the city to redevelop the property, which is between two Caltrain stops and near a BART station.

Kidder’s offering memorandum for the property and the adjacent 17.6-acre market site, which both went up for sale last year, offers SteelWave one idea: Build a 150,000-square-foot building on a roughly eight-acre portion of the parking lot to give the produce market’s tenants a place to relocate. That would help pave the way for a new life science campus, allowing a developer to demolish the market and build a 1.1 million-square-foot project there, according to a copy of the memorandum obtained by the San Francisco Business Times last summer.

However, that concept depends on whether SteelWave is even interested in redeveloping the market, which as of last week hasn’t changed hands, according to San Mateo County records. The parking lot’s “freeway commercial” zoning allows for up to 435,000 square feet of new development there, contingent on certain transportation demand management, off-site improvement or design standards being met. That’s plenty of new potential space as-is, although the city is also working on amending its general plan to allow for denser development on the parking lot and market sites. City officials are slated to take that amendment up for approval next quarter, the Business Times said in September.

The parking lot can accommodate new shops, restaurants and hotel rooms, while new research and development space is allowed but would be “regulated” by the city to preserve the site for commercial uses such as large-format retail sales, according to the city’s zoning code. Meantime, new homes, warehouses and distribution centers are all prohibited there.

The deal means that SteelWave has spent $183 million on South San Francisco property over two transactions in the last six months. The first and larger of the two was its $98 million acquisition of a shuttered strip mall at 180 El Camino Real that the firm plans to redevelop into a 722,000-square-foot office and research campus, 160 multifamily units and a Safeway grocery store, which would anchor the surrounding area.

SteelWave got the City of South San Francisco’s approval in December to build the Safeway, which is slated to break ground next quarter, city data show. Plans for the three-building campus and the 160-unit apartment structure are under review.





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