By Jon Peterson
Technology tenants across the Bay Area drive the value of commercial real estate, and investors have been raising significant funds to acquire the right assets with credit occupiers. San Francisco-based GI Partners is one of those entities. The firm recently announced the formation of GI Real Estate Essential Tech + Science Fund, according to sources familiar with the company’s investment activities.
The new fund has a nationwide investment strategy for assets, and it will favor real estate assets that continuously operate in order to support critical functions of the technology and life science industries. The fund will be looking to acquire a combination of data center properties, life science assets and R&D facilities within the office and industrial sectors.
GI, which has not responded to requests for comments, has placed at least three recently acquired assets in the San Francisco Bay Area into the new commingled fund, as stated by industry sources.
The largest of these was the acquisition of the Mt. Eden Research Park in Hayward. This property was purchased for $155 million, according to public records. This asset is a 369,986 square foot six-building life science campus.
The commingled fund now also owns a Redwood City property. This is the 89,145 square foot The Pointe, which was acquired for $30.1 million. This property has two life-science buildings.
The other Bay Area asset is the Walsh-Bowers Assemblage in Santa Clara. This deal was for a portfolio of three data center assets. There is at least one asset in the fund that is located outside of the Bay Area. This was the $79 million purchase of 3701 Market Street in Philadelphia. This property is a purpose-built lab and R&D facility.
This commingled fund is still attracting new commitments from large institutional investors. One of these was from the Employees Retirement System of Texas. The pension fund has approved a $100 million commitment into the fund, according to public information provided by the investor. It is not clear at this time how large the GI Partners commingled fund is planning to be.
The Essential Tech + Science Fund has an open-ended investment structure. This will mean that it will always be open to receiving new commitments from investors. This offering will be the first open-ended fund for GI Partners. All of its previous commingled funds had a close-ended structure and had a limited time period to raised capital.