GI Partners Pays $155M for Bay Area R&D Campus

Mt. Eden Research Park. Photo courtesy of JLL.

GI Partners has added another life science / R&D property to its Bay Area portfolio. The local private equity firm has acquired Mt. Eden Research Park in Hayward for $155 million. BentallGreenOak sold the campus at roughly $418 per square foot. TPG Real Estate provided $114 million in acquisition financing, arranged by a JLL debt placement team.

A separate JLL Capital Markets team, led by Senior Managing Directors Will Connors, Rob Hielscher and Michael Leggett, represented the seller and procured the buyer. The property was 81 percent leased at the time.

Mt. Eden Research Park sits on a 25-acre site near the San Mateo-Hayward Bridge at 25801 – 25901 Industrial Blvd. The 369,986-square-foot campus comprises six one- and two-story buildings that range in size from 43,000 to 91,000 square feet. Office space totals 277,500 square feet, while the remaining 92,500 square feet is laboratory space, CommercialEdge data shows. The buildings also feature 16- and 22-foot clear heights, as well as eight roll-up doors and loading docks.

The campus presented an opportunity for a full life sciences conversion, as more than half of the occupied space is operated by biotechnology firms Illumina and RefleXion Medical. Other tenants include Weichert Workforce Mobility, Option Care Health and Czarnowski.

According to the property’s website, about 68,182 square feet are available for leasing. The two suites, of roughly 13,322 and 54,860 square feet, can be leased separately or combined. Amenities at Mt. Eden include a landscaped park with a Japanese tea garden, training rooms, a fitness facility with showers and executive conference rooms. The campus includes a retail component, which is occupied by Subway, Starbucks and 7-Eleven.

Mt. Eden Research Park was constructed between 1999 and 2001. The surrounding area is occupied by other biotechnology and R&D firms. Nearby major roads include Interstate 880 and State Route 92. The campus benefits from a highly educated labor pool, with UC Berkeley roughly 23 miles away and Stanford University about 21 miles from the property.

Life sciences investment

JLL’s Hielscher noted in a prepared statement that life science space is currently one of the most favored asset classes and the limited product that does come on the market trades at record prices. In March, GI Partners acquired a two-building office and R&D portfolio at roughly $382 per square foot.

JLL also notes that the Bay Area boasts one of the densest concentrations of life sciences professionals in the U.S., and tenant demand for the asset class is outpacing supply, boosted by an aging population and an increased focus on health.

The strong demand for life science properties has driven developers to add more quality space to the market, such as the 50-acre Kilroy Oyster Point in South San Francisco, where Kilroy Realty Corp. has recently broken ground on the project’s $940 million second phase.