Peninsula Office Project Gets $33.8M Construction Loan

Developers DivcoWest and Dewey Land Co. have secured a $33.8M construction loan for their 44.6K SF office project in downtown Burlingame.

JLL Capital Markets, which arranged the financing, announced the loan this week.

Approved for 250 California Drive in 2018, the project will consist of four stories of office space, ground-floor retail and a three-level underground parking facility, and it has "already drawn a major VC tenant," according to a statement by DivcoWest Director Chris Eldemir. 

Eldemir did not disclose the tenant. 

That unnamed company has leased a full 12.5K SF floor representing about 30% of rentable office space coming to 250 California, according to a DivcoWest spokesperson. 

Financing for the project, which is adjacent to Burlingame's Caltrain station and due for completion in 2022, comes as interest in Peninsula office properties holds steady. Compared to those in San Francisco proper, Peninsula and Silicon Valley offices have seen more deals continue, Cushman & Wakefield Senior Director of Bay Area Research Robert Sammons told Bisnow earlier this month. 

Predictions of more flexible work arrangements have some experts and suburban office owners anticipating more demand for properties outside central business districts. 

Burlingame entered this quarter with 815K SF of Class-A office space, a 26.1% total vacancy rate and an average direct asking rent of $68.88 per SF, according to a JLL report.

JLL Capital Markets Managing Directors Jordan Angel and Chris Gandy represented DivcoWest and Dewey Land Co., with the loan issued by Bank OZK.

"We're excited to have the opportunity to partner with our friends at Dewey Land Company and look forward to delivering a high quality, boutique office building in the downtown Burlingame market," Eldemir said.