Chick-fil-A to open in Millbrae transit village
Earlier this year, San Josebased developer Republic Urban Properties placed 400 new homes on the doorstep of the Millbrae Station, which is considered the largest multimodal transit hub west of the Mississippi. Now, it’s adding a Chick-fil-A.
The popular Atlanta-based restaurant chain has been growing its presence in the Bay Area and has struck a deal to open a flagship restaurant at Gateway at Millbrae Station, a recently completed transit-oriented development, or TOD, that spans 9 acres abutting the Millbrae transit hub, where BART and Caltrain connect.
The restaurant, known for its spicy chicken sandwich and waffle fries, is set to occupy 5,000 square feet of a total 44,000 square feet of new retail space that has been constructed as part of the larger Gateway development over the course of the pandemic.
The project includes a 164room Residence Inn by Marriott hotel and more than 150,000 square feet of office space, constructed over the course of the pandemic. Of the 400 homes that are part of the project, 80 are set aside for military veterans.
The Chick-fil-A location is expected to open its doors by mid-2024, and unlike an overwhelming majority of the chain’s other locations, it won’t feature a signature drive-through — a change that’s meant to align with the car-free spirit of the larger project, according to Brian Yi, Republic Urban’s director of investments.
“Understanding that this is next to a BART station, a Caltrain station, next to SamTrans and the airport, it becomes a different strategy for Chick-fil-A,” said Yi. “I believe this is their first drive-through-less location in the Bay Area, and I’m glad that they were able to coordinate with us on this development and see it as a true TOD.”
There are upward of 20 Chickfil-A locations in the Bay Area, with new restaurants recently added in Emeryville and at another new Urban Republic project in Livermore, called Republic Square at Livermore.
Yi said the restaurant signed its lease for the space in Millbrae in late October — and it’s not the only new tenant that the developer has scored in recent months.
More than half a dozen other businesses will open their doors on the perimeters of the Gateway development next year. They include Panda Express, Basecamp Fitness, Crumbl Cookie, Sourdough & Co., iCode, Liberty Bank and Zero&, a new concept beverage brand specializing in handcrafted fruit tea, specialty milk tea and boba that was launched out of Silicon Valley last year.
“We’ve been thrilled to see the increasingly positive momentum and velocity of new businesses investing their time and resources into the Bay Area again, especially in the last year,” said Yi.
Over at the company’s Republic Square at Livermore project, a 63,735-square-foot strip shopping center that is adjacent to two hotels owned by the company as well as the San Francisco Premium Outlets in Livermore, leasing has also ticked up significantly.
That project is about 70% leased, according to Yi. A 5,750square-foot Taj Mahal opened its doors in October, and a 2,624square-foot Pho Ao Sen opened for business in September.
Additionally, Republic Urban has signed leases with a dozen other tenants, including Starbucks and Meet Fresh.
Yi said that it is no secret that the economic environment has been “challenging” in the wake of the pandemic, “particularly for lenders and capital markets.”
In September, the developer closed on a $24 million bridge loan with the Banc of California for its Livermore retail center. The financing aims to support the developer in building out the property as a business hub and attracting tenants.
“We opened up during the pandemic, and so we took a pretty big hit on leasing and things slowed down significantly,” said Yi. “Obviously, we — and many other developers out there — were impacted by that. And so leasing was a bit slow.”
Republic Urban broke ground on Republic Square at Livermore in 2018, and launched construction on Gateway at Millbrae Station in 2019. Both projects were delivered at a time of increased economic uncertainty.
As hybrid work has become the norm for many Bay Area companies in the wake of the pandemic, the Gateway project has yet to secure an office tenant. However, the project’s zoning allows for research and development, meaning that Gateway could tap into the region’s demand from life sciences tenants.
The total cost for the Gateway project’s residential component was $375 million, while the hotel component cost $98 million to build and the veteran’s housing cost $46 million. The development cost for the Livermore shopping center was about $40 million.
Michael Van Every, president and managing partner of Republic Urban Properties, has remained optimistic about the projects’ potential to attract tenants and create commerce hubs in each of their respective communities.
“These leases will further solidify its position as a cornerstone for vibrant urban living and unparalleled commercial enterprise,” he said about the Gateway project.