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-based 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, which totals 375,000 square feet, and the 12-story South Tower, which are on the west side of U.S. Highway 101; and a four-story, 72,000-square-foot office building on the east side of the freeway on Shoreline Court.
“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 remain hungry for top commercial properties, despite the economic uncertainties that the coronavirus has unleashed.
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.