By Jon Peterson
As Genentech looks to reaffirm its commitment to South San Francisco, it wants to ensure that it has full control of its real estate fortunes in the north San Mateo county city. The life-science innovator, now a wholly owned subsidiary of the Swiss pharmaceutical giant Roche, has acquired four life science office and lab buildings in South San Francisco for $269 million, as stated in public documents. The properties total 334,000 square feet and are located at 620, 640, 645 and 660 East Grand Avenue. The sale closed at the beginning of July 2018.
The seller of the properties was Irvine, Calif.-based HCP. This publicly-traded real estate investment trust did not respond to a phone call seeking comment for this story. HCP did state in its 2018 second quarter earnings report that a tenant in its life science portfolio had exercised an option in its agreement with the property investment firm and acquired the properties. It did not name who this tenant was in the report. Genentech was leasing all of the space at the four buildings when the option became available.
Genentech has been involved with the assets in South San Francisco for a long time. “Genentech exercised a purchase option, which was included in our lease to acquire these buildings in 2016. We purchased the property in two phases, the second phase completed in July 2018. At Genentech, we are, on an ongoing basis, reviewing our real estate portfolio. Genentech has leased and occupied these office and lab buildings since 2006,” stated an official with Genentech in an email.
HCP does have a regional office in Northern California. This is located in Foster City. The company owns a total of 85 life science buildings in the San Francisco / San Jose markets. These assets make up a total of 69 percent of the life science assets in its total portfolio. The assets in San Francisco/San Jose have a combined occupancy of 96.5 percent.