SOUTH SAN FRANCISCO — In a mega-deal, a big investor has bought a landmark office center that features two prominent office towers in South San Francisco near Oyster Point, paying $1 billion for the trophy property.
Ventas, a real estate investment trust, through one of its subsidiary funds, has bought the Genesis South San Francisco office campus, which consists of two big office buildings, including a tower, and an amenities center, the buyer said Thursday.
“We are pleased to further expand our growing research and innovation footprint into the premier South San Francisco life science cluster with the acquisition of this outstanding portfolio,” said Debra Cafaro, chief executive officer with Ventas.
The seller was an affiliate headed by Boston-base Bain Capital and San Diego-based Phase 3 Real Estate Partners, San Mateo County property documents show.
The deal includes the 21-story North Tower that totals 375,000 square feet, the 12-story South Tower that totals 340,000 square feet, which are on the west side of U.S. Highway 101; and a four-story office building that totals 72,000 square feet on the east side of Highway 101 at 4000 Shoreline Ct.
“Strong and growing capital flows into the life science sector are accelerating innovation and discovery,” Cafaro said. “These flows support the demand for first-class lab space in dynamic markets like South San Francisco.”
The deal indicates that big-time investors continue to hunger for top commercial properties, despite the economic uncertainties that the coronavirus has unleashed and a spate of government-ordered business shutdowns.
The Class A trophy portfolio is strategically positioned at the entrance to the South San Francisco life science cluster,” Ventas said Thursday.
Even with a mammoth price tag of $1 billion, Ventas believes it can harvest plenty of upside from the three office buildings. The two towers were customized to suit the needs of biotech, life sciences, and tech firms.
Nearly half of the tenant base consists of public companies averaging over $10 billion in market cap, according to Ventas. The buyer described the remaining tenants as early-stage and mid-stage life sciences companies backed by robust venture capital and private equity firms.
“The South San Francisco market consistently ranks as one of the elite life science clusters in the world,” Ventas said.