October 4, 2022

Lane Partners says it will begin construction on the first phase of its massive Southline project this year without a signed tenant in hand.
Menlo Park-based Lane received the necessary approvals earlier this summer from South San Francisco and San Bruno for the project, which is slated to rise at 30 Tanforan Ave. on 28.5 acres straddling the two cities.
The developer has begun demolition work on a portion of the site, according to Principal Marcus Gilmour. First up will be Building 1, a 370,000-square-foot, six-story commercial building; a tenant amenity building; and a 1,095-space parking structure, per Gilmour.
The architect is DES; the general contractor is DPR Construction. Lane declined to disclose development or construction costs.
“We’ll start working on grading and foundations with a target date to go vertical in quarter one of 2023,” he said.
Lane plans to build the first commercial building on a speculative basis, or without a tenant in hand. Gilmour said the company will finance the project via a mix of equity and construction loans, though he declined to provide details.
If all goes to plan, Building 1 will reach completion in the late third quarter of 2024, Gilmour said. It’ll have company in Kilroy Realty’s 900,000-square-foot Kilroy Oyster Point and the fifth phase of Gateway of Pacific, both of which were 0% preleased as of the second quarter of this year and are also set to deliver in South San Francisco in 2024.
Southline, which is approved for up to 2.8 million square feet of office and R&D space, sits just a few blocks from the Shops at Tanforan in San Bruno, a 44-acre site where Pasadena-based life science developer Alexandria Real Estate Equities (NYSE: ARE) plans to raise a “new mega campus”; residential uses are also being contemplated at the site, the city of San Bruno has said. Alexandria has purchased the entire retail site but has not unveiled formal plans.
Together, those two projects could comprise “a potential new center of gravity” for the Peninsula, said Gilmour. Southline, which sits adjacent to the San Bruno BART station and boasts proximity to two Caltrain stations, several major freeways and samTrans service, is “one of the most transformative transit-oriented development projects in the entire Bay Area,” he said. 
Market reaction to that first speculative building will determine the timeline for the rest of the project, Gilmour said. He declined to give leasing rates, saying Lane would seek market rates for new construction Class A space. Newmark’s Eric Bluestein, Ben Stern and Dan Matteucci are listing the space.
“If leasing activity is what we hope it will be, then we’ll kick of construction on that second building as part of Phase 1,” he said. Phase 1 of Southline is set to include a total of 685,000 square feet across two six-story buildings.
Southline is designed to accommodate “a robust lab user,” Gilmour said, adding that Lane Partners believes the project would suit a tech tenant equally well. He said Lane had already received early interest from both user types but did not give further details. 
Both sectors are facing headwinds; a slower-than-expected return to in-person work has hindered office leasing, and life science companies continue to grapple with the economic volatility that has both spooked investors and prompted venture capital firms to cut back on funding. Gilmour said Lane believes Southline will appeal to more mature life science tenants with stable balance sheets, and added the long-term nature of the project means it’ll be able to draw earlier-stage tenants once the markets calm.
Lane Partners entered into a 12-year development agreement with the city of South San Francisco for Southline, city documents show. The developer will have the option to extend the agreement an additional five years so long as it has obtained temporary certificates of occupancy for each of the buildings in Phase 1.  
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