BRISBANE, CA—Hospital acquisitions of private practices and healthcare systems' move of outpatient services away from hospital campuses are leaving major medical providers in control of a large share of leasing activity. As a result, buildings with modern amenities and flexible floor plans are in high demand, boosting the construction pipeline and contributing to a rise in completions, GlobeSt.com learns in a Marcus & Millichap research report on medical office properties.

As the majority of space demand is funneled into recently constructed and newer-vintage buildings, earlier-vintage assets and outdated buildings will bear the brunt of attrition as physicians retire and acquired practices are consolidated into newer space. A recent example of this trend is UCSF Health's lease of approximately 40,000 square feet of class-A office space at Diamond Investment Properties' Sierra Point Towers. UCSF Health will complete its move to 8000 Marina Blvd. in the first quarter of 2017.

Sierra Point Towers offers turn-key tenant improvements free of charge to create a uniquely designed space for each of its tenants, very much in line with the modern amenities healthcare tenants are seeking today.

“Over the past year we have worked closely with UCSF to design and create customized office space for several of their teams,” said Andrew Diamond of Diamond Properties. “At Sierra Point Towers, we 'turn-key' tenant improvement build-outs with sophisticated and creative design elements; the kind of space a leading health provider deserves.”

Sierra Point Towers are twin eight- and 12-story bayfront office towers with approximately a half-million square feet of class-A office space. Located on Highway 101 at the first freeway exit south of San Francisco at 2000 Sierra Point Pkwy. and 8000 Marina Blvd., shuttle service is available to Caltrain and BART. Sierra Point Towers features onsite restaurants and food trucks, fitness center, basketball court, outdoor collaboration areas and generous parking.

“We are excited to partner with UCSF Health to provide their employees with modern collaborative office space, Bay views, convenient transportation access and many onsite amenities that today's company requires,” Diamond tells GlobeSt.com.

Some of the companies on the tenant roster that UCSF joins include eBay Inc., Aimmune Therapeutics Inc., Stella & Dot LLC, NetEase, BioMarin Pharmaceutical, Myovant Sciences Ltd., Horizon Pharma, Innoviva Inc. and XOJET. During the past year, Sierra Point Towers has welcomed new tenants occupying more than 150,000 square feet.

Newmark Cornish & Carey represented UCSF in the transaction.

As previously reported, with continued strong fundamentals in place throughout the Bay Area, an investor recently took advantage of timing in the cycle to shed a mega-portfolio of 10 office assets.

Newmark Cornish & Carey represented UCSF in the transaction.

Instant Insights /

Medical Services Continue Exodus From Hospital Campuses

Related Stories

Recommended For You