B3 Investors moves to next phase of remaking San Leandro mall into R&D campus

B3 Investors plans to redevelop a former outdoor mall in San Leandro with a recently shuttered Macy’s into a 400,000 square foot research-and-development campus.

The locally based developer led by David Dokko is turning the 42-acre Bayfair Center into the Speedway at Bayfair, an R&D and production campus at 15555 East 14th Street, the San Francisco Business Times reported, citing a marketing brochure.

Conor Ranahan of Newmark, who is marketing the property, said phase one is already complete, comprising a 140,000-square-foot, two-story building.

Phase two will convert a former 260,000-square-foot Macy’s into a research and development facility, with completion of the three-story building expected next year.

In January, Macy’s announced it would close its 67-year-old department store at the Bayfair Center along with four other stores across the U.S. A month later, it announced it would close its flagship store in San Francisco’s Union Square.

In 2022, Austin-based B3 Commercial Management and Hong Kong-based GAW Capital Partners bought the 816,800-square-foot Bayfair Center for $57 million, or $70 per square foot, according to The Real Deal.

At the time, Newmark said the buyer could redevelop a large portion into a mixed-use campus including life sciences. The connection between B3 Commercial Management, which bought the property, and B3 Investors, which is developing it, isn’t clear. The latter doesn’t appear in state business records.

Ranahan said there is potential for B3 to develop even more space for R&D on the Bayfair Center site.

“A lot of science, material science, robotics that don’t need to pay the lab rents to be in Berkeley or Emeryville can occupy space in San Leandro that’s half the rent — or less,” Ranahan said.

B3 Investors also developed Gate510, a 300,000-square-foot tech and biotech campus at 1933 Davis Street in San Leandro.

R&D vacancy in the Oakland submarket that includes San Leandro was 11.4 percent in the first quarter, according to CBRE. San Leandro holds 2.9 million square feet of the region’s 20 million square feet of R&D buildings.

— Dana Bartholomew

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