Bay Area Waterfront Research Complex Trades in $90 Million Deal Amid Spike in Biotech Demand
Four Corners Properties Scoops Up Peninsula-Area Office Property Geared Toward Life Sciences Tenants
A Bay Area investor is driving its hometown stake even deeper after closing on the more than $90 million purchase of a waterfront office complex primed for future life sciences tenants.
Four Corners Properties, a Silicon Valley real estate firm, finalized a deal with seller Westlake Group for the 150,000-square-foot Shoreway Innovation Center in Belmont, California, a city nestled along the peninsula and surrounded by some of the world’s largest biotech companies. According to CoStar data, the acquisition closed Tuesday for significantly more than the $61 million Westlake purchased the 1301 Shoreway Road property for in October 2016.
The four-story building is a little more than 80% occupied by a mix of tenants, many of which have leases that expire in less than three years. That allowed Four Corners to secure a discount from the original listing price — Westlake put the building on the market in May with guidance that started at $95 million — and gives the investor a chance to tailor its future tenant roster to one of the most in-demand uses in the region.
Mike Taquino, one of the CBRE Capital Markets brokers who represented Westlake in the latest deal, said the property “offers the opportunity to bring office and life science space to a market where tenant demand is far outpacing available supply.”
The Shoreway purchase price equates to about $564 per square foot, significantly less than the $656-a-square-foot average among similar properties that have sold in the peninsula area over the past year, according to CoStar data.
Despite the Bay Area’s title as the second-largest life science market in the country with more than 30 million square feet of lab and research space, accelerating demand over the past two years has resulted in a steep shortage of available space. The regional life science sector has a vacancy rate of less than 2.5%, according to CBRE and CoStar data.
Available space in the peninsula region is even more scarce, with a vacancy rate of less than 1%.
Full Article by Katie Burke: https://product.costar.com/home/news/1770050702