Woodstock Development Buys Additional Ownership Stake in One Bay Plaza for $108M

Woodstock Development has acquired the remaining ownership in One Bay Plaza, a premier life science and office campus in the San Francisco Bay Area. Iron Point Partners sold their interest in the property to Woodstock in a transaction valued at $108 million. With this purchase, Woodstock now owns 100% of the building.

One Bay Plaza is a 9-story, 196,000-square-foot life science and office property located at 1350 Bayshore Highway in Burlingame. The building is currently 85% occupied with more than 35 tenants, including Alaska Airlines, Cushman & Wakefield, BTIG and Acco Brands.

Woodstock purchased the property in partnership with Iron Point Partners in 2019. Since, the Burlingame has experienced strong office growth, including Google and Facebook expanding their presence in the market. Still, the Bay Area region has faced challenges during the pandemic. In December, the fourth quarter report from Marcus & Millichap estimated office rents would fall 9% to $54.90 per square foot. This exceeds the 8.5% mean rate of rent decline last year. While the metrics don’t look great, the report was optimistic that a full recovery would come to the market. The 9% dip in office rents stems from an onslaught of new office deliveries. This year, the office inventory has grown by 3.3% with 5.7 million square feet of new stocked completed. While construction is slowing, there is still a pretty substantial pipeline product underway.

While the market was struggling, leasing activity began to recover in the third quarter with office leasing volume has exceeded 1 million square feet. In the third quarter, 2 million square feet was leased in the market, a 74% increase over the second quarter when leasing volume also surpassed 1 million square feet, according to research from Savills.

As an owner of the property Woodstock has executed a value-add strategy, upgrading the lobbies, restrooms and corridors, and the firm hired Mark Cavagnero Associates to design a 12,000 square feet amenity area including conference rooms, collaboration rooms, ping pong, fitness room with showers and lockers and a social pantry for tenants.