Jun. 3—After celebrating the grand opening of its transit-oriented community known as Gateway at Millbrae Station last spring and landing a big office tenant in the winter, developer Urban Republic Properties has sold the project's commercial component.
Swift Real Estate Partners, a San Francisco-based real estate investor with properties across the West Coast, confirmed Monday that it has acquired a roughly 180,600-square-foot, three-story building featuring office space above ground floor retail that's part of the Millbrae project — built on the largest multimodal transit hub west of the Mississippi — for $47.7 million, or roughly $264 per square foot.
Along with 157,000 square feet of office space that was leased to transit agency SamTrans in December, the 9-acre project includes 44,000 square feet of retail, 400 apartments including 80 for low-income veterans, and a 164-room Residence Inn by Marriott hotel.
Jack Waldsmith, director at Swift, said the company has previously owned properties on the San Francisco Peninsula but parted with them in recent years.
"We had a lot of success on the Peninsula earlier in this real estate cycle, and it's a target submarket," Waldsmith said, adding that the firm decided to pick up the project despite the current "volatile market" because of its location and SamTrans' lease commitment, which came in spite of the rise of remote work and changing commuter patterns ushered in by the pandemic that could have jeopardized the project's outcomes.
"This is a compelling opportunity that exemplifies the investments Swift is making in the office sector — high-quality properties in the best markets with strong tenancy and cash flow. SamTrans' long-term commitment to the property is a testament to its appeal, and we look forward to bringing this building to life," he said.
Swift's next focus will be leasing the project's remaining retail component, Waldsmith said. Current tenants include Chick-fil-A, Panda Express, Basecamp Fitness, Crumbl Cookies, Sourdough & Co., iCode, Liberty Bank and Zero&, a concept beverage brand launched out of Silicon Valley.
Swift will also complete the construction of tenant improvements at the property, an investment projected to exceed $100 million. SamTrans is set to relocate its headquarters from San Carlos to the Gateway project after improvements inside of its new space wrap up.
Urban Republic did not immediately respond to a message seeking comment on Monday. The San Jose-based developer first bid on the Gateway site in 2011, after BART identified the land around Millbrae Station for development, but was not initially selected.
When the bidding process was reopened later that year, the developer had another chance to make a deal, and was successful. Urban Republic broke ground on the Gateway project in 2019.
Reach Laura Waxmann: [email protected]
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