John Kilroy Spills Big News About The Exchange
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Kilroy CEO John Kilroy announced that its 680k SF mixed-use complex in Mission Bay, The Exchange on 16th, could be pretty much full before it even breaks ground.
We snapped John as he spoke last night at USC Lusk Center's Real Estate: 2030 forum at the Hyatt Regency on the Embarcadero. John says Kilroy will start construction on the $450M complex in June. "It looks like we might have it almost all leased to two great credit tenants," he says, and surprisingly, neither are in tech. LOIs are in place, he adds. The project is a slam dunk because it's close to public transit, visible from the freeway, and Mission Bay has become the southern portion of SoMa—where Millennials live and there's room for housing to be built.
The Exchange at 16th is made up of two six-story and two 12-story buildings that'll have roof decks, natural light, high ceilings and views of downtown and the Bay Bridge (above, new renderings he showed last night). The four buildings will connect so that some floors will have 90k SF floor plates. Density is big for his firm; he won't build a project that can't handle at least eight employees per 1k SF. This Mission Bay project will be able to house a whopping 12 per 1k SF. Companies don't like that kind of density for long periods, but when work ramps up, they need the capacity to hire quickly and pack employees in.
There's a massive amount of office stock in the US that's going to be obsolete because it can't handle densities, he says. Kilroy tears out hundreds of tons of granite in the buildings it buys each year. These days granite is like having wingtip shoes, he jokes. He explains Kilroy's big focus on going green: Millennials are the most sustainable group that has ever walked the face of the earth, other than American Indians and Aborigines, John says. It's part of their culture to save the earth. Down in LA, sex appeal also sells; he showed a snazzy rendering video paired to James Brown's Sex Machine touring Kilroy's creative office/retail haven coming to Hollywood.