This Week's San Francisco Deal Sheet

The weekly compilation of the San Francisco Bay Area metro’s biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? 

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Spruce Biosciences will relocate its executive offices to 611 Gateway Blvd. in South San Francisco, according to a recent Securities and Exchange Commission filing. 

Spruce entered into the agreement on Dec. 1 and will lease 6.5K SF of office at the Gateway Center location. The lease is expected to go into effect on Jan. 1, 2023, with a 62-month leasing period. Spruce will have the option to extend the lease for three more years.

Spruce will vacate its location at 2001 Junipero Serra Blvd. in Daly City, California, according to the SEC filing. The company terminated its lease at the location on Nov. 28.

LEASES

Parnassus Investments renewed a lease on its 18K SF office at One Market Plaza in San Francisco and expanded by 7.5K SF. This represents a 40% increase to the company’s footprint at the One Market Plaza location. The deal was brokered by Transwestern. 

“Interest in Parnassus’s investment offerings has grown, and this expansion will allow our team to continue to support our valued clients,” Parnassus Investments Chief Operating Officer Marc Mahon said in a press release. "Our space at One Market Plaza provides an excellent environment for our team to maintain an optimal work environment, focused on collaboration and communication.”

One Market is currently 95.8% leased and is located in the city’s South Financial District submarket. That district is one of the better-performing office submarkets in the city, with an 18.5% vacancy rate, according to a recent Transwestern report. 

UC Davis Health opened a new medical office building in Sacramento last week, the Ernest E. Tschannen Eye Institute Building, along with an expansion to its Ambulatory Care Center. 

The property is at 4680 Y St. and was developed by McCarthy Building Cos., with support from Vanir Construction Management. The building was designed by HGA in a partnership with San Francisco-based TEF.  

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Samuel Merritt University in Oakland proposed plans to expand its location at 525 12th St. in Pill Hill, SF YIMBY reported. The expansion would include an additional 237K SF campus and public plaza.

Strada Investment Group is the project developer, while Perkins&Will is designing the property. Expansion would require the demolition of a 6.5K SF basketball court and would include classrooms, administrative offices and labs. Groundbreaking is slated for 2023 if the plans are approved. 

FINANCING 

Gantry secured a $30M loan last week for the purchase of a 315-unit mobile home park in San Jose. The loan was provided to a private investor with a seven-year fixed-rate term, in the mid-4% range. The mobile home park contains three laundry rooms, heated pools, a BBQ pit and parking for cars, boats and RVs.

“This loan threaded the needle for the borrower to hit all their criteria with a 90-day rate lock, maximum proceeds, five rather than three years of interest only, and an excellent rate in a rapidly rising rate environment. The borrowers have been a minority owner for decades and this acquisition allows them to own the property outright and take control of this generational asset, the financing was a critical portion [of] the partner buyout,” Gantry Director Jeff Matlock said in a press release. 

THIS AND THAT 

A San Jose office building at 826 North Winchester Blvd. is facing foreclosure, following two abandoned efforts to develop housing on the property, according to Silicon Valley.com. 

Socotra, the Sacramento-based REIT and lender for the property, is threatening to foreclose on the site, resulting in an auction, according to county property records. The $6.45M loan on the property, issued in December 2021, has not been repaid, leading to the potential foreclosure. 

Kochland LLC purchased the property in December of last year, and has been the target of several unsuccessful mixed-use development proposals, with the most recent proposed by Kochland in May 2022.