A 64,103-square-foot industrial building at 161 Starlite Street in South San Francisco has changed hands for $16.05 million, and its new owner has plans to slice it into more than 85 tiny flexible warehouse units aimed at small businesses. The buyer, WareSpace, says the property marks its first foothold in the Bay Area, betting that local entrepreneurs are starved for small, move-in-ready industrial space.
According to a press release from WareSpace, the company purchased 161 Starlite Street for $16.05 million and intends to convert the site into more than 85 flexible units, most ranging from roughly 200 to 2,000 square feet. As reported by Bisnow, WareSpace plans to renovate the 1965-built, single-story property into 86 move-in-ready microbay flex spaces, transforming what is currently a traditional warehouse into dozens of separately leasable suites.
WareSpace co-founder and CEO Joseph Ely told Bisnow the company sees a familiar pattern playing out in the Bay Area. “The Bay Area has a great small-business presence, but like a lot of other major cities, it has had a dwindling supply of small spaces,” Ely said, according to the outlet’s report. Ely added that a search on LoopNet turned up only two available South San Francisco industrial spaces of 2,000 square feet or smaller, telling Bisnow, “The LoopNet search tells the whole story. There are no options for [small] businesses.”
Small-Bay Supply Keeps Shrinking
The scarcity Ely described lines up with the numbers. Small-bay industrial inventory in the area has declined by approximately 5% over the past five years, with no new small-bay supply currently under construction, per the same WareSpace release. Bisnow’s reporting adds further context, noting that Peninsula industrial vacancy stood at 5.6% in the second quarter and that South San Francisco alone accounts for nearly half of the Peninsula’s 35.1 million square feet of industrial space…