November 16, 2016
By Mark Terry, BioSpace.com Breaking News Staff
The San Francisco Bay Area is having a huge boom in biotech-related real estate development. “You go where the science is, and guess where that is?” said Mike Futrell, the city manager of South San Francisco, at a recent Peninsula Structures breakfast. “It’s in the Bay Area and specifically in South San Francisco.”
“The City of South San Francisco is the largest biotech center in the world,” Alex Greenwood, Director of Economic & Community Development told BioSpace in a previous interview. “SSF has more life science employees, more patents, more Venture Capital funding, more NIH funding, and more drugs actually developed – than any other city in the world.”
And now the South San Francisco Planning Commission will decide tomorrow whether to approve a “biotech hotel.”
The project is a new biotech hotel in the Genesis project, which is near Airport Boulevard adjacent to San Bruno Mountain. The Genesis project, formerly known as Centennial Towers, is 12-stories, and was acquired in late 2015 by Phase 3 Properties from Jack Myers, of Myers Development. Part of the entitlements granted was the possibility of a second tower, and another facility for amenities.
The new owner’s proposal is for a boutique hotel with between 70 and 200 rooms, a restaurant and retail space. It would also connect to the office space.
“This central link provides the type of collision space where tenants and the community can meet, and is designed to create the vibrant and active life science community center that is central to Phase 3’s vision for Genesis South San Francisco,” the city’s report says.
The first tower has 400,000 square feet of Class A commercial office space. It also houses a market, gym, yoga center and a conference center.
The second tower was originally planned to have 340 to 360 condominiums and a restaurant in a 21-story building. But the new owner has changed that plan, and hopes to have 400,000 square feet of research and development facilities for life science companies. That construction has already begun and is expected to be finished by 2018.
The newly proposed building would have 17,000 square feet of retail, restaurant and fitness space on the first two floors, and the third through seventh floors would have between 14 and 22 hotel rooms on each level. Phase 3 Properties acquired the project and development in December 2015 for $144 million.
The two largest areas for biotechnology in the U.S. are Cambridge and the San Francisco Bay Area. Dino Perazzo, of real estate brokerage CBRE, speaking at the Peninsula Structures breakfast, said, “I’ve never seen a carve-out, or the only carve-out, being biotech. So I think that if you look back at the Bay Area as a whole, broadly speaking, we’ve been known and identified with high technology. And here we are, talking about biotech, and I think rightly so. The Peninsula is the home of biotech. What we call the primary market in the Bay Area is biotech and to your point is, the largest and most dense life science research market in the world. Bigger than Cambridge.”
Not only is the area a huge center for biotech startups, but big pharma companies have entered the market recently. Merck , for example, has a deal for 300,000 square feet in South San Francisco. Bristol-Myers Squibb is expanding into the area, and Genentech is doubling down on its existing campus, buying up property it is currently leasing.
Much of the rationale for larger biopharma’s approach to the area is proximity to talent. Perazzo said, “Now we have the lion’s share of demand coming from outside the region… They are doubling down because they need the talent that’s here for that science and that’s needed to manage that science.”
And if approved, the new biotech hotel will offer plenty of room for them to stay.
