After a heated competition for a prime piece of downtown real estate in Redwood City, Hunter/Storm LLC won out.
Hunter/Storm will develop Block 2, a 2.3acre city-owned plot on Middlefield Road that is currently home to a city parking lot, after it got the green light from the city council on May 21.
Hunter/Storm’s proposal involves a $150 million project that will be mostly office with some retail on the lot adjacent to the Redwood City Caltrain station.
Curtis Leigh, director of development for Hunter Properties Inc. – the umbrella company of Hunter/Storm – said his firm’s plan is to build a pair of eight-story office buildings totaling about 261,000 square feet with a 3,000 square-foot retail component and about 6,000 square feet of conference space. The developer also is proposing a 120-room hotel to be constructed across the street from the office buildings in conjunction with Palo Alto-based BPR Properties.
Five developers were interested in the site, but the short list came down to Cupertino-based Hunter/Storm and Lowe Enterprises of Los Angeles. The two developers submitted final proposals at the end of March.
Lowe Enterprises had proposed to build 262,000 square feet of office, 145,0000 square feet of apartments and a 140-room hotel.
Dan Zack, downtown development coordinator for Redwood City, said the council felt that both developers were well-qualified and well-financed but in the end, Hunter/Storm had an edge in
a number of areas.
For one, according to Zack, council members liked the fact that Hunter/Storm had already secured two private parcels totaling about a quarter of an acre close to Block 2 on a “pivotal” corner that the city doesn’t control.
“Some of the council members liked the idea of being able to do the whole block with one clean project without having to build around anything,” Zack said.
Leigh said Hunter/Storm had bought the property more than a year ago before the city had even put out request for qualifications to develop the Block 2 site, also known as the “Depot
“We knew the city was working on their downtown plan for some greater density,” he said.
Another point for Hunter/Storm had to do with the fact that it is a local company that has developed seven projects in the city over the past 12 years, including three office projects and three retail sites.
“They liked that local connection and track record they could see right before their eyes,” Zack said.
Also, the fact that Hunter/Storm had a financial partner in Kilroy Realty Corp. that could pay cash for the project didn’t hurt.
Los Angeles-based Kilroy Realty recently took over building out a new 341,000 square-foot office campus for Synopsys Inc. in Mountain View. With the completion of that campus, Kilroy’s Bay Area commercial real estate portfolio will total about 3 million square feet from Silicon Valley to Marin County, with 2.1 million square feet centered in San Francisco’s vibrant South of Market (SOMA) district.
“Such a strong financial partner meant they would be able to move quickly and immediately,” Zack said.
Indeed, Hunter/Storm anticipates completion of construction by February 2015 while Lowe Enterprises was targeting June 2015.
Hunter/Storm has named Korth Sunseri Hagey Architects out of San Francisco as its architect on the project and Vance Brown Builders Inc. out of Palo Alto to serve as its general contractor.
The project will be one of Hunter/Storm’s larger developments, Leigh said.
The developer’s preferred strategy is to lease the two office buildings to a single user.
One will be 216,000 square feet and the other 45,000 square feet.
“Two users would be our second choice,” Leigh said. “It remains to be seen if we break it up into floors.”
Mary Ann Azevedo covers real estate for the Business Journal. Her phone number is 408.299.1820.