(EDITOR’S NOTE: The seller was Oyster Point Development LLC, an entity associated with China’s Greenland USA. That company paid $171 million for the fully entitled site from Shorenstein Properties and SKS Partners in August 2016. The acquisition follows a January 2018 acquisition Kilroy made in the neighborhood, when it acquired 345-349 Oyster Point Boulevard (“Oyster Point Tech Center”), a 146,000 square foot laboratory and office project for approximately $111 million from Multi-Employer Property Trust, a Bentall Kennedy open-end commingled real estate equity fund that invests in a diversified portfolio of institutional-quality real estate assets in the United States, and its trustee, the Bethesda, MD-based NewTower Trust Company.)
Fully Entitled for 2.5 Million Square Feet of Lab and Office Space
Kilroy Realty Corporation (NYSE: KRC) today said it has completed the acquisition of a life science development site (“Kilroy Oyster Point”) in South San Francisco, the West Coast’s leading life science market, for approximately $308 million. The site is fully entitled for 2.5 million square feet.
KRC said it plans to develop, over multiple phases, a state-of-the-art laboratory and office complex that will eventually encompass 11 buildings spread across a nearly 40-acre waterfront site.
Situated at the intersection of Oyster Point and Marina Boulevards along the preferred northern corridor of South San Francisco, the site is immediately adjacent to the company’s existing three-building Oyster Point Tech Center. On a combined basis, the overall project will have a meaningful footprint in South San Francisco’s large and rapidly growing life science community, home to more than 200 biotech companies, including such legendary companies as Genentech and Amgen. Market fundamentals reflect the growing attraction of South San Francisco’s life science community, with the region’s Class A office and laboratory space vacancy rate at less than 3%.
In recent years, the region’s commercial biotech market has expanded to more than 12 million square feet of office and laboratory space across more than 500 acres, accommodating a range of entrepreneurial start-ups and established companies. The region pulls talent from several world-class universities, including UC San Francisco, UC Berkeley and Stanford University. It is also well-connected by multiple public transportation options to nearby residential communities such as Mission Bay, and to the nexus of technology innovation and venture capital funding found in both the Silicon Valley and San Francisco.
“We’re excited to partner with Kilroy Realty on this important new project,” said Mike Futrell, City Manager of South San Francisco. “Given its strong track record in creating modern work environments, we believe Kilroy has both the vision and the experience to develop this expansive waterfront site into a world-class center for life science innovation.”
“Kilroy Oyster Point is a significant opportunity to expand our West Coast life science platform in a prudent and disciplined manner,” said John Kilroy, KRC’s Chairman and Chief Executive Officer. “It offers all the advantages we look for in new development—a strong location in a world-class market serving a dynamic industry with all the services and amenities required to attract today’s young, urban innovative workforce.”
About Kilroy Realty Corporation. Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the West Coast’s premier landlords. The company has over 70 years of experience developing, acquiring and managing office and mixed-use real estate assets. The company provides physical work environments that foster creativity and productivity and serves a broad roster of dynamic, innovation-driven tenants, including technology, entertainment, digital media and health care companies.
At March 31, 2018, the company’s stabilized portfolio totaled approximately 13.9 million square feet of office space located in the coastal regions of Los Angeles, Orange County, San Diego, the San Francisco Bay Area and Greater Seattle and 200 residential units located in the Hollywood submarket of Los Angeles. In addition, KRC had five projects totaling approximately 2.1 million square feet of office and PDR space, 237 residential units and 120,000 square feet of retail space under construction.
The company has been recognized by GRESB as the North American leader in office sustainability for the last four years and is listed in the Dow Jones Sustainability World Index. At the end of the first quarter, the company’s stabilized portfolio was 59% LEED certified and 71% of eligible properties were ENERGY STAR certified. More information is available at http://www.kilroyrealty.com.