Uber Technologies Inc. and Alexandria Real Estate Equities Inc. formed a joint venture to develop land in San Francisco’s Mission Bay neighborhood and build a new headquarters for the car-booking service.
The deal includes the acquisition of two parcels as well as parking spaces and permits, according to Alexandria Chief Executive Officer Joel Marcus. Uber plans to lease the almost 423,000 square feet (39,000 square meters) of offices that will be built on the properties, the Pasadena, California-based real estate company said today in a statement.
Uber, which landed a $17 billion valuation in a June financing, is adding to office space it currently has on Market Street as it rapidly grows. The development site is adjacent to land where a new Golden State Warriors arena is planned and in an area where Alexandria has about 1 million square feet of space focused on technology and life-science tenants.
“You are seeing a tremendous influx of technology and life sciences companies from suburban areas into rare urban neighborhoods,” Marcus said in a telephone interview. “It’s all about quality of life and recruitment.”
The venture, which took about three months to form, will be 51 percent owned by Alexandria and 49 percent by Uber, he said. The companies didn’t disclose its value.
San Francisco is poised to surpass Manhattan as the most expensive U.S. office market next year as technology companies extend a surge in leasing, according to an August report by brokerage CBRE Group Inc. Almost three-quarters of the city’s tenant deals this year through June were signed by tech firms.
In 2010, Alexandria had sold the land parcels at 1455 and 1515 Third Street to Salesforce.com Inc. as part of a larger $278 million deal. Salesforce purchased the property with the intention of building a new headquarters before opting to lease space in downtown office towers instead. The National Basketball Association’s Warriors agreed in April to buy about 12 acres (4.9 hectares) of Salesforce’s undeveloped land for its new stadium.
Alexandria bought back the two lots for $125 million, according to Marcus.
The Uber project, which will feature steel and glass on the outside and be “creative, collaborative and innovative” on the inside, is expected to break ground in January and will be completed by the end of 2016, Marcus said.