The life science commercial real estate market has been one of the most active and prominent ones in the Bay Area since the start of the global COVID-19 pandemic in early 2020. Since then, the demand for lab space has skyrocketed, prompting developers and cities alike to explore projects and expand existing ones. BioMed Realty, which has become of the largest life science property owners in the country, is one of these firms, and it just received approval from South San Francisco’s Planning Commission to expand a massive project that it has been building speculatively for several years.
The Gateway of the Pacific is a multi-phase, 1.5 million-square-foot life science lab campus located in South San Francisco along Oyster Point Blvd. and Gateway Blvd. Most of the property is also adjacent to a railway line, and one portion of the development, Phase 5, sits on the other side of the rail spur from the rest of the campus. The site was approved for redevelopment as part of an adopted master plan by the city in 2013, and BioMed began the construction of its campus in 2017.
Now that the first three phases have been completed and mostly leased, and that Phase 5 has commenced development, Phase 4 remains the last portion of the campus to receive final approval and commence construction.
According to prior reporting by The Registry, nearly all of Phase 1, around 510,000 square feet, has been leased to AbbVie. Phase 2, which is around 440,000 square feet, has been leased to Amgen, while Phase 3 has been partially leased, and the firm is in negotiations to lease the remainder of the space, stated Ethan Warsh, director of development at BioMed Realty during the company’s presentation to South San Francisco Planning Commission earlier this month.
Given the interest in the project and record demand for lab space across the region, BioMed Realty is now exploring ways to increase the size of the remaining buildings in Phase 4. The proposal that the company presented to the City included transferring development rights from one portion of the parcel and adding additional floors in order to expand the north building in Phase 4, as well as to add floors to the adjacent parking structure.
The transferred rights would increase building 4N from 5 stories to 9 nine stories and add 2.5 floors to the parking garage next to the building. This would scale the north building to 232,905 square feet, leaving the south building at 112,937 square feet.
The question of transferring the development rights was something that the Planning Commission had not encountered before, and they did not have a precedent case to help guide their decision. However, none of the commissioners objected to the proposal and after consulting with the City staff on the impact of the potential increased traffic resulting from larger buildings, they were convinced that this proposal would not be contradicting the master plan approved nearly a decade ago.
With unanimous support, the City’s Planning Commission approved the revised plans, giving BioMed Realty the ability to execute a revised plan that will help shape South San Francisco further.
South San Francisco has been at the center of some massive redevelopment efforts in the recent past. At the same meeting where BioMed’s expansion was approved, Lane Partners also received full support from the Planning Commission to move forward with its 28.5-acre development called Southline Commons. This development would see the construction of 2.8 million square feet of Class A office and R&D space with an onsite parking structure for 972 vehicles.
In April of this year, Boston Properties and Alexandria Real Estate Equities announced that they commenced the construction on 651 Gateway, a 300,000 square foot life science project that will be part of a 1.7 million-square-foot life science and innovation cluster in this neighborhood.
That same month, San Francisco-based DivcoWest announced that it obtained $124 million financing for the acquisition and conversion of 5000 Shoreline, a three-story, 143,000 square foot Class A property located on approximately 8.5 waterfront acres in the City.
The San Francisco Bay Area life sciences market posted a vacancy rate of 2% as of the end of the fourth quarter of 2021, according to CBRE research. At the same time, there are currently 54 tenants in the market for a cumulative 2.6 million square feet of life sciences space across the Bay Area.