Kilroy Realty Corporation (KRC) disclosed a $95 million acquisition of a 3.1 acre development site in San Francisco’s Mission Bay neighborhood and its plan to start building a 680,000 square-foot mid-rise office campus in 2015.
Positioned at the southwestern periphery of Mission Bay and next to the 280 Freeway and alongside the 16th Street Corridor, this property is expected to be in high demand for millennial neighborhoods of Potrero Hill, the Mission District and Dogpatch.
Shuttle services to Caltrain and BART are available at the site and it is also within walking distance from the new Central Subway line, which is scheduled to be complete later this decade.
This West Coast real estate investment trust (:REIT) plans to invest around $450 million (incorporating the land acquisition) for developing the office campus, which can be constructed in two phases. With this, the company aims at meeting the dearth of collaborative space, which is in high demand in San Francisco.
As a matter of fact, Mission Bay is rapidly finding its place among the popular locations in San Francisco and the region serves as one of the fastest growing residential, job and entertainment centers. It is attracting an increasing number of retail and entertainment amenities. Hence, we believe that this purchase is a strategic fit and would aid Kilroy Realty in expanding its property base with premium assets.
Kilroy Realty currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like The GEO Group, Inc. (GEO), Parkway Properties Inc. (PKY) and Terreno Realty Corp. (TRNO). All these stocks carry a Zacks Rank #1 (Strong Buy).
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