Oxford Properties’ $173M Bay Area Life Sciences Play

Foundry31. Image courtesy of Oxford Properties Group

Oxford Properties Group has paid $172.7 million for a mixed-use building in the Bay Area and will convert part of the property into lab space, continuing a streak of life sciences investments by the Toronto-based real estate giant.

The company snapped up Foundry31, a 402,700-square-foot asset at 3100 San Pablo Ave. in Berkeley, at the boundary with Emeryville and Oakland. LBA Realty sold the property, a former factory that was repositioned as a work and gathering place with 125,000-square-foot floorplates.

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Oxford will immediately convert 100,000 square feet in the property to life sciences and lab infrastructure, partnering with San Francisco-based City Center Realty Partners to undertake the revamp. The asset, which sits on a 7.5-acre site, already includes medical, office and manufacturing space along with onsite amenities such as a fitness center, bike storage and EV charging stations.

Located in San Francisco’s East Bay area, the property is within several miles of both San Francisco and the University of California. The Bay Area life sciences market continues to thrive, with positive net absorption of 671,439 square feet in the fourth quarter of 2020, according to a market report by Kidder Matthews. Vacancy rates declined slightly to 3.46 percent by year-end.

Oxford’s deal comes soon after Longfellow Real Estate Partners acquired a two-building office campus in San Mateo—directly south from Foundry31 across the San Francisco Bay—with plans to reposition the nearly 250,000-square-foot asset as a life science property.

Pension giant bets on biotech

Oxford’s latest acquisition also follows its January purchase of Emeryville Public Market, a 148,000-square-foot mixed-use property less than one mile southwest of Foundry31, from a joint venture of CCRP and Angelo Gordon. The property at 5959 Shellmound St. includes ground-floor lab space, a food hall and about 60,000 square feet of office and retail space earmarked for lab conversion.

The deal included two additional parcels, one of which was recently entitled for a nine-story life science building spanning 200,000 square feet. Oxford also announced it had purchased three life science assets in Boston, paying for a total of $276 million for the properties on both coasts.

Oxford has been raising its profile in the life sciences sector in recent years, adding to a global portfolio that currently totals some $80 billion of assets under management. The company said its new life sciences investments in the first few months of 2021 total more than $1.2 billion in deployed capital, including new development opportunities at the properties.

The firm, which is owned by the Ontario Municipal Employees Retirement System, added that it will initially focus on the San Francisco Bay Area, San Diego, Seattle, Boston, and other emerging markets for its life sciences expansion in North America. Oxford is also eyeing opportunities across Europe.