SAN FRANCISCO-Shorenstein Properties LLC will be breaking ground at Mission Bay sooner rather than later, if the word on the street is any measure. The locally headquartered fund sponsor has a signed letter of intent from South San Francisco-based drug maker FibroGen for more than half of the 450,000 sf of development entitlement it acquired this time last year, local sources familiar with the situation tells

Shorenstein has said its 3.8-acre Mission Bay development will consist of two five-story buildings each totaling plus-or-minus 225,000 sf. If the LOI with FibroGen is consummated, FibroGen would get a 240,000 sf building to itself plus expansion rights for what would end up being the 210,000-sf second building, according to one source. FibroGen is currently housed in about 100,000 sf at 225 Gateway Blvd. in South San Francisco. Both FibroGen and Shorenstein have declined comment.

According to multiple sources, Shorenstein executive vice president Tom Hart revealed at a local real estate discussion last week that the company was in advanced discussions with a tenant for the new development and was confident enough about breaking ground this fall that it had started purchasing construction materials including steel. FibroGen representatives were seen “hanging out” at the booth, according to one those sources.

The Mission Bay submarket is a 303-acre, mixed-use development that at build-out will include 6,000 units of housing; five million sf of office, R&D and lab space; 800,000 sf of retail space; a 500-room hotel; 50 acres of open space; a 500-student public school and a police and fire station.

A significant portion of the office space is being developed by the University of California at San Francisco, which is building a $1.5-billion biomedical research and teaching center with 2.65 million sf of facilities. Another 1.4 million sf is being developed by publicly traded life sciences REIT Alexandria Real Estate Equities.

The Shorenstein parcel, which previously held an Esprit clothing warehouse, offers unobstructed views of San Francisco Bay. Shorenstein acquired the property with entitlements in place from ECOR-SF Holdings Inc. Local brokers told at the time of the acquisition that entitled land in Mission Bay was going for upwards of $60 per sf of space that could be built. In the photo that accompanies this article, Shorenstein’s property occupies the lower right-hand corner.

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