SamTrans leases space at Millbrae Station transit hub
From its conception, Republic Urban Properties has touted the Gateway at Millbrae Station development as the quintessential “transit-oriented development.” Now, the San Jose-based developer has scored, perhaps, the perfect tenant to take the entirety of its 157,000 square feet of office space: a transit agency.
On Monday, the board of the San Mateo County Transit District, or SamTrans, voted to enter into a 30-month lease for the office space of the 9-acre mixed-use development — which also includes 400 apartments, including 80 for low-income veterans, 44,000 square feet of retail and a 164-room Residence Inn by Marriott hotel.
The project, built on the largest multimodal transit hub west of the Mississippi, was constructed on a 99-year ground lease with Bay Area Rapid Transit. In a resolution passed Monday, the SamTrans board said it would use about 105,000 square feet of the space and rent the rest to public and private users, unless and until the district requires additional capacity.
Even with the lease, SamTrans has the option to buy the building for $126 million within 30 months of moving in.
“It’s quite a cliche, but this certainly is a nice endof-the-year present,” said Republic Urban President Michael Van Every.
He said that landing SamTrans in a post-pandemic market flooded with empty space was a combination of luck and coming up with the right project at the right time.
“It’s a bad secret that the commercial office market is bad in every part of California,” Van Every said. “At the same time, you create your own luck in a market like this.”
Other tenants in the complex include Chickfil-A; Panda Express; Basecamp Fitness; Crumbl Cookie; Sourdough & Co.; iCode; Liberty Bank; and Zero&, a concept beverage brand specializing in handcrafted fruit tea, specialty milk tea and boba that was launched out of Silicon Valley.
In 1990, SamTrans moved to its headquarters at 1250 San Carlos Ave. in San Carlos, a former bank constructed in 1979. The building “is outdated, was not built to current seismic standards or building codes, does not reflect current office environments,” according to the resolution the board passed.
“The Current HQ is functionally obsolete, with an inefficient floor plan and layout, too-large building core, and multiple spaces designed for usages that serve no contemporary office purpose,” the resolution stated.
SamTrans worked with the brokerage CBRE to explore options, looking at 90 properties and six finalists, before settling on the Millbrae site, which includes BART and Caltrain stations.
“The Gateway at Millbrae Station is in an ideal location for the headquarters of a public transit provider and mobility manager, in a transit-oriented development at one of the largest intermodal stations in the western United States, immediately adjacent to SamTrans, shuttle, BART, Caltrain and future high speed rail services,” the resolution states.
The total cost for the Gateway project’s residential component was $375 million, while the hotel component cost $98 million to build, and the project’s 80 units of veterans housing cost $46 million.