Presidio Bay Ventures Secures $118M for Bay Area Life Science Build

A partnership led by Presidio Bay Ventures has secured $118 million to develop a 150,000-square-foot class-A, R&D and life science lab building in San Carlos, California. Square Mile Capital Management originated the loan with financing arranged by Jeff Wilcox of Gantry.

Near San Carlos Caltrain Station and walking distance to Downtown San Carlos, the development will transform an existing car dealership into a four-story class-A building that will aim to meet LEED Gold, FitWel, GBAC and USRC certifications. The property will feature art lab buildouts, a fitness center with full locker rooms, an approximate 4,000 square foot roof deck and outdoor seating.

Presidio Bay acquired the property in December 2020, in a joint venture with private investment firm Kinship Capital. At the time of the acquisition, the joint venture planned to redevelop the property into a 123,000-square-foot class-A life science. Presidio Bay and Kinship Capital were awarded the acquisition after demonstrating a clear commitment to closing during a closely held off-market sales process. This process was launched soon after the initial shelter-in-place orders were announced. Although the property is on a 45,000-square-foot car dealership and surface parking lot, the project will take full advantage of the existing engineering infrastructure, which was already designed to withstand significant loads.

The Bay Area is the largest life science market in the country, beating out Boston when you combine the life science clusters in the region, including San Jose and the East Bay. In addition the region’s network of universities will continue to support life science activity in the area.

In the US, life science demand has continued to exceed supply, as companies in the sector sought nearly 24 million square feet of new real estate in the third quarter alone. That figure exceeds the amount of lab space under spec construction by nearly 2.8 million sq. ft., according to CBRE. The US vacancy rate for lab and research & development space is at 4.9% nationally. Average asking rents also ticked up 7.5% in the top 12 markets CBRE tracks from March to September of this year.