SOUTH SAN FRANCISCO—This submarket is one of the nation's top life sciences markets with more than 100 biotech firms employing more than 14,000 people. The vacancy rate was 0% as of third quarter 2015, while overall vacancies in the Peninsula life science market were just 0.9%.
Centennial Towers, a 12-story, 340,000-square-foot, class-A office building, is set to undergo a transformation into a life science facility, rebranded as Genesis. With limited future supply projected, Centennial Towers is well positioned to benefit from the market's highly favorable demand-supply fundamentals.
Cornerstone Real Estate Advisers' Alternative Investments Group has originated a $144.3 million loan to finance the acquisition and repositioning of the building on behalf of an institutional client. The project will be developed by Phase 3 Real Estate Partners Inc. (P3RE).
Jamie Henderson, chief investment officer, Alternative Investments Group at Cornerstone Real Estate Advisers, tells GlobeSt.com: "The combination of P3RE's vision for life science real estate, extremely attractive submarket fundamentals and an asset of this quality made this an appealing opportunity. We look forward to seeing Centennial Towers transform into Genesis and believe P3RE is the perfect sponsor to complete the renovation."
Centennial Towers is located within a one-mile radius of major biotech and life sciences companies, including Genentech and Amgen. It offers easy access to Highway 101, which links downtown San Francisco to Silicon Valley and public transportation via the San Bruno Caltrain station.
"There's an intrinsic quality that is right in line with our life science vision," said Neil Fox, CEO of P3RE. "The design and construction is spectacular. We're going to do something the market has never seen before; this project will set the new bar for laboratory research space."
This project represents the fourth acquisition by P3RE this year under its strategy to acquire, manage and reposition well-located properties in select core life science markets on the West Coast. The borrower was represented by HFF's debt placement team, which was led by senior managing director Tim Wright, managing director Todd Sugimoto and director Zack Holderman.
"Centennial Towers offers an exceptional opportunity to tap into the thriving life science market of the Bay Area," said Henderson. "We are excited to support P3RE, whose market knowledge and niche expertise will help meet the submarket's robust demand for sophisticated life sciences campuses."
As previously reported, another South San Francisco life sciences site is seeking investors.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
