Burlingame approves Baco Lake for office and R&D complex with 482K sf

San Francisco-based Baco Lake Office, a firm managed by developer Lawrence Lui , is looking to bring two nine-story office and R&D structures to the Peninsula. The Burlingame Planning Commission gave Baco the go-ahead for the development.

The project, located at 620 Airport Boulevard, will rise 143 feet and create about 481,660 square feet of leasable space and 303,490 square feet for parking. The two buildings will look the same. The project is positioned five miles from San Francisco International Airport and half a mile from Menlo Park-based Lane Partners eight-story life science development in Burlingame called Peninsula Innovation Point. 

Innovation Point has attracted some big tech players, with Facebook opening an office at the office and life science campus with nearly 1 million square feet. The company opened its first physical store in that campus when it rebranded as Meta. 

The Peninsula office market, similar to the rest of the Bay Area, experienced distress during the first quarter, according to a first-quarter report by Kidder Mathews. The vacancy rate increased from 15 percent to 15.8 percent quarter-over-quarter, and leasing activity stood at 340,000 square feet for the quarter, roughly a 59 percent decrease year-over-year. Office sales fell by 62 percent year-over-year from 845,497 square feet to only 318,593 square feet.

“The decline in year-over-year investment sales activity shows some hesitation in the market due to recession concerns,” the report said. 

The life science market, in contrast, has maintained its momentum from a red hot 2022, according to a first-quarter report by Colliers. R&D space reported 27,516 square feet of positive net absorption with 6.7 million square under construction. Of the space under construction, 22.5 percent has been preleased, and 84.9 percent are life science conversions. Vacancy dropped from 4.5 percent to 4.1 percent quarter-over-quarter.

“Despite economic fluctuations, high interest rates, and rising construction costs, the Peninsula R&D sector will remain strong in the coming quarters due to the robust demand for high-end life sciences space,” the report said.

Read more

San Francisco

Peninsula office sales drop 94% in Q4, per Kidder Mathews

San Francisco

Hudson Pacific sells Skyway Landing at loss

San Francisco

Demand for office and R&D rises 14% in Bay Area