Partly cloudy skies early will give way to cloudy skies late. Low 53F. Winds WSW at 5 to 10 mph..
Partly cloudy skies early will give way to cloudy skies late. Low 53F. Winds WSW at 5 to 10 mph.
Updated: August 19, 2022 @ 10:52 pm
Reporter
Rendering of a new biotech campus underway in Millbrae.
San Mateo County’s commercial market is among the strongest in the Bay Area, with low vacancy rates and strong leasing activity, new reports from commercial real estate firm Colliers show.
Vacancy rates for combined office, research and development and industrial space were 6% at the close of the first half of the year, during which rents climbed steadily, according to the reports. That’s compared to nearly 20% vacancy in San Francisco, 14.4% in the Oakland metropolitan area and 6.4% in Silicon Valley, the reports show.
Rents meanwhile for both office and R&D space in the county were roughly $5.90 per square foot per month, a figure that’s climbed steadily since at least 2013, when average office rents were closer to $3.50 and R&D space was sub $2, according to a report from Nicole So, a senior research analyst for the Peninsula.
“R&D has consistently been carried by the strong life science presence that exists on the Peninsula,” she writes.
Comparatively, R&D rents in Silicon Valley were $2.80 per square foot while office rents there were $5.27. Office rents in the Oakland metro area were $4.98 and $6.38 in San Francisco, according to Colliers reports.
As another indicator of economic growth, close to 460,000 square feet of net new leases were measured in the second quarter of the year in the R&D sector in the county, a figure that takes into account both those moving in and moving out. That figure for office space meanwhile was 96,700 square feet.
To the south, Silicon Valley reported close to 1.2 million square feet of new leases split between office and R&D uses during that time. And in San Francisco more than 500,000 square feet of office space was vacated, according to Colliers reports.
The largest lease of the quarter in the county was 285,000 square feet in Millbrae, where drug developer Eikon Therapeutics signed a deal to move into an under-construction biotech campus near the train station.
In all, there is 4.6 million square feet of R&D space under construction in the county, a 96.4% increase from last year, according to the report.
But, it notes, “Investment in R&D screeched to a halt in Q2.”
Life science funding during the first two years of the pandemic was “monumental,” but “experts have noticed a slowdown as investors become more selective of the companies they finance and are branching into different property types to diversify their holdings,” the report states.
“However, the Peninsula’s location, talent base, and steady flow of venture capital makes San Mateo County a permanent fixture for life science demand,” it continues.
Nationally, signs of the office market stabilizing were emerging as of the first quarter of the year, according to Colliers. The U.S. office vacancy rate was 15%, on par with the second quarter of 2021. Prior to the pandemic rates hovered below 12%.
The county’s office vacancy was 9.2% in the second quarter while R&D vacancies were 5.1% and industrial vacancies, including warehouses, were 2.7%.
South San Francisco has traditionally been the R&D powerhouse of the Peninsula, fueled by its biotech sector.
But other cities, including San Carlos, Redwood City, Burlingame and Millbrae, hoping to cash in on the lucrative market that boomed amid the pandemic while others faltered, have increasingly looked to usher in the industry.
South San Francisco is slated to place a commercial space parcel tax on the ballot this year, estimated to tax the industry by $50 million yearly if passed. The initiative, the product of signature-gathering campaign, has stirred concern from the City Council that it could accelerate dispersing the sector throughout the county.
Among major projects in South San Francisco, the 790,000-square-foot Gateway of Pacific campus was completed in recent months. That project was roughly two-thirds pre-leased, according to Colliers. The city last week also approved a 2.8 million office and R&D development slated to be built over coming years, one of many now in the pipeline.
In Redwood City, another 2.3 million square feet of office space could come from the Redwood LIFE project, which seeks to overhaul and expand existing offices.
Burlingame, meanwhile, this year received plans for a 1.5 million-square-foot biotech campus. It’s one of many the city is planning for its Bayfront as the City Council there looks to wean itself off tax reliance on the hotel industry.
Millbrae officials hope to accomplish a similar task. The Eikon lease represents the city’s first major step into the life science industry.
corey@smdailyjournal.com
(650) 344-5200 ext. 105
corey@smdailyjournal.com
(650) 344-5200, ext. 105
To continue, please log in, or sign up for a new account.
We offer one free story view per month. If you register for an account, you will get two additional story views. After those three total views, we ask that you support us with a subscription.
A subscription to our digital content is so much more than just access to our valuable content. It means you’re helping to support a local community institution that has, from its very start, supported the betterment of our society. Thank you very much!
Please purchase an Enhanced Subscription to continue reading.
Your current subscription does not provide access to this content.
DIGITAL ACCESS to all our award winning content online
Commenting capabilities on every story
Access to our daily e-edition for the past 90 issues
The good feeling of supporting real, local news in your community
DIGITAL ACCESS to all our award winning content (does not include e-edition) online
Commenting capabilities on every story
The good feeling of supporting real, local news in your community
Thank you for visiting our booth at the Disaster Preparedness at the Event Center! Enjoy one free month of access to the San Mateo Daily Journal’s website and e-edition. Offer expires August 31, 2022 so sign up today!
Sorry, no promotional deals were found matching that code.
Promotional Rates were found for your code.
Sorry, an error occurred.
do not remove
Sorry, there are no recent results for popular videos.
The San Mateo Area Chamber of Commerce is hosting Rediscover San Mateo Community Fest to bri… Read more
Maxine Terner said:
View more
miac said:
View more
craigwiesner said:
Loving v Virginia flawed? Wow. Even Clarence Thomas hasn’t gone that far.
View more
Ray Fowler said:
Jorg…
SS,DD
View more
Ray Fowler said:
View more
Success! An email has been sent to with a link to confirm list signup.
Error! There was an error processing your request.
If it breaks, we’ll send it to you.
Join this email list to be kept abreast of breaking news.
Sign up today!
Wake up to our carefully curated list of headlines with the Daily Journal’s daily newsletter.
All the top stories — local news, local sports, lifestyle, opinions, obituaries, entertainment, plus regional/national/global info to keep you informed. Newsletter arrives every morning for your convenience.
Sign up today!
Would you like to receive our Marketing and Business Intelligence newsletter? The Daily Journal is proud to offer a newsletter providing vital information that will benefit your career, your business, and/or your organization.
Get updates on LOCAL SPORTS!
All the latest and greatest local sports headlines straight to your inbox. Every Monday, Wednesday and Friday morning, the Daily Journal will send you links to our best local sports stories.
Sign up now!
If you have an event you’d like to list on the site, submit it now!
About Author
