By Meghan Hall
IQHQ, a Solana, Calif.-based life sciences REIT, continues to expand its Bay Area portfolio. In a deal that recorded mid-November, IQHQ paid $164 million to buy Oracle’s vacant offices at 10 and 12 Twin Dolphin Dr. in Redwood City, according to public records. The transaction included a 263,000 square foot office building and adjacent parking lot that sit on a combined 15 acres of land.
Oracle has been slowly selling off several of its Bay Area assets. At the end of August, Blackstone affiliate BioMed Realty purchased an office complex plus adjacent land at 301, 401 and 501 Island Parkway for a total of $160 million. In May, Oracle sold 488 Almaden Boulevard for $155 million, or just under $409 per square foot, to Lane Partners. In February, Oracle Placed the San Mateo Marriott up for Sale, with guidance pricing as high as $190 million.
IQHQ has also been extremely active. Over the past 18 months, the firm has acquired several South San Francisco properties for $255 million, according to The Registry’s reporting. According to the firm’s website, IQHQ specifically focuses on life sciences clusters in markets such as San Francisco, San Diego, Boston and the United Kingdom’s Golden Triangle.
The life sciences market continued its rapid expansion during the third quarter, according to a recent report by Kidder Mathews. Q3 gross absorption totaled 1.7 million square feet. Some 3.2 million square feet of life sciences space is under construction across the Bay Area, and vacancy sat at just 2.8 percent. Venture capital continues to pour in, totaling $14.2 billion.
In San Mateo County, where Redwood City is located, life sciences activity continues to “dominate” according to Kidder Mathews. The County saw 393,529 square feet of positive net absorption last quarter. Leases include Freenome’s 350,000 square foot lease at Phase 3 Properties’ Genesis Marina and Genentech’s 230,000 square foot lease at 751 Gateway, owned by Alexandria. Both projects are still under construction. Vacancy sits below the region average, at 2.6 percent, and asking rental rates begin at $3.50 per square foot per month triple net, and range up to $7.50 per square foot per month, triple net.