By Jon Peterson
Anticipating high interest in a potential sale of its mixed-use lab asset in the East Bay, New York City-based BentallGreenOak has placed on the market the six-building Mt. Eden Research Park in Hayward. The potential sales price on the property could be as high as $130 million, according to sources that are aware of the sale of the property.
BentallGreenOak, who is working with JLL on the sale of this property, did not respond to an email seeking comment for this story. The team from JLL working on the sale includes Will Connors, senior managing director, and Erik Hanson, senior director. JLL declined to comment when contacted for this story.
BentallGreenOak was the original developer of the property, and it brought the asset on the market between 1999 and 2001. This is the first time that the asset has been brought up for sale, and it is a sizable one for the city Hayward. Due to the potential size of the transaction, some industry sources anticipate that the sale will attract many institutional investors.
The Mt. Eden Business Park has a total of six buildings that cover 25 acres with addresses at 25801, 25821, 25841, 25861, 25881 and 25901 Industrial Boulevard. The property totals 369,986 square feet with one- and two-story buildings.
The asset is considered to be an existing R&D/life science investment opportunity with value-add potential for future owners. The buildings have a mixed tenant roll and are presently 81 percent leased with an average weighted lease term remaining of 4.4 years. There are two major tenants that occupy 54 percent of the total space. Life-science company Illumina takes up approximately 30 percent of the asset, and RefleXion Medical is in the property for approximately 25 percent.
The property will soon have 40 percent of its space available for rent over the next 2.5 years, which means future ownership will likely not have to wait to execute a conversion strategy in order to increase the life science component of the space in the future. The property as it stands now has 65 percent of the space flex/R&D, 28 percent life science and 7 percent traditional office. By 2025, the breakdown could be 57 percent life science, 40 percent flex/R&D and 3 percent traditional office. All of the space by 2030 could become life science.
There is significant disparity of tenant demand versus existing availability for life science space in the overall San Francisco Bay Area. Currently, more than 4 times as much tenant demand is chasing deals in the market as there is available space to accommodate it, according to data compiled by JLL. This imbalance places an inordinate amount pressure on existing assets creating scarcity across the region. Any company with existing properties to sell, will likely find a willing buyer.