By Jon Peterson
Irvine-based HCP has paid $83 million or $488 per square foot to buy the 170,000 square foot Edgewater Science & Technology Park in South San Francisco. The property is located at 260 and 270 Littlefield Avenue.
This represents a rare transaction for the real estate investment trust, because it doesn’t do a lot of buying of existing assets. “We invest in real estate for life sciences in this way on a very select basis. We thought that this property would be a very strong addition to our existing portfolio in the San Francisco Bay Area,” says Jon Bergschneider, executive vice president of HCP Life Science Estates. He works out of the company’s regional office in Foster City.[contextly_sidebar id=”0millATeZbaA2X9tMTQUNV2BSKTt8vN1″]Due to a non-disclosure agreement, the buyer was not able to name the seller or the listing agent on the trade of the property. Public records indicate that it is an entity associated with Washington, D.C. -based Carlyle Group.
The Edgewater property is a six-building asset. The property was built out in several phases between 1987 and 1989. The property had been renovated by the previous owner about two years ago. The new owners may be able to add some value in the future when a number of the leases come up for renewal. “The leases in this complex have a life that runs for three to seven years. Given how tight the market is, we should be able to increase the value when the leases come up for renewal,” said Bergschneider.
HCP is currently more of an active player in life science real estate through its development activities. Its most recent start was the development of the 230,000 square foot second phase of The Cove at Oyster Point in South San Francisco. The development cost of the latest phase is $185 million, as stated by HCP in its 2015 Fourth Quarter earnings report.
The real estate investment trust has made the greater San Francisco Bay Area a primary market for investing in life science real estate. The company’s total life science portfolio totals around five million square feet in 122 properties. The majority of the space, or roughly three million feet, is located in the Bay Area. This portfolio is located across four sub-markets. These are South San Francisco, Redwood City, Mountain View and Hayward.