Bay Area Firm Lands $75M to Acquire, Revamp Life Science Campus

Shoreway Innovation Center. Image courtesy of CBRE

Four Corners Properties and their institutional equity partner have received $75 million in financing for the acquisition and redevelopment of the 7-acre Shoreway Innovation Center in Belmont, Calif., into a new life science campus. CBRE arranged the financing.

Four Corners had acquired the asset at 1301 Shoreway Road this past December for $90.3 million. The financing will be used to fund a portion of the property’s redevelopment costs.

Preliminary plans call for the construction of two Class A life science buildings, totaling about 500,000 to 600,000 square feet, as well as a multi-story parking structure with about 1,500 stalls.

Shoreway Innovation Center is along the US 101 corridor, one of the nation’s highest concentrations of life science facilities, in part because of its location near top medical and biotechnology programs including Stanford University and the University of California, San Francisco.

Mike Walker and Brad Zampa with CBRE Capital Markets’ Debt & Structured Finance group arranged and secured a three-year, non-recourse, floating-rate loan with two extension options through a private equity firm.

In a prepared statement, Walker said the planned campus “will meet a critical need in the market for high-quality facilities as we continue to see low vacancies and high rents on the San Francisco Peninsula.”

Rapid evolution

New construction and conversions of office space in the Bay Area are being driven by ongoing demand in the life science sector, according to CBRE. By the end of the first quarter, the inventory of life science facilities had reached 38.4 million square feet in the Bay Area, with ample preleasing of space in the pipeline.

The San Francisco Peninsula had the region’s lowest vacancy rate, at only 3.6 percent, as well as the highest average Class A rent, at $7.50 per square foot. Further, CBRE tallied 6.8 million square feet of tenant demand in the market in the first quarter.

Just this past week, Aralon Properties leased a 142,000-square-foot speculative office and R&D building in South San Francisco to fast-growing biotech company InterVenn Biosciences.