San Francisco-based life sciences real estate development firm IQHQ completed the acquisition of a South San Francisco site known as South City Station.
San Francisco-based life sciences real estate development firm IQHQ completed the acquisition of a South San Francisco site known as South City Station. The site is on almost two acres. IQHQ is now in talks for a 213,000 square foot development at the site.
South San Francisco is the location of numerous biopharma companies, including Amgen, Mission Bio, CytomX Therapeutics, NGM Biopharmaceuticals, Freenome, MyoKardia, Annexon Biosciences, and Genentech, among many others.
“We are thrilled to acquire the South City Station development site, which not only represents a significant project for the South San Francisco market, but a prized addition to our growing real estate portfolio,” said Tracy A. Murphy, president of IQHQ. “Once complete, South City Station will immediately meet the growing demand for premier life science real estate and R&D space in the thriving South San Francisco market. It will be developed to attract top talent.”
The South City Station is next door to the new South San Francisco Caltrain Station, which is slotted to open in Spring of 2021, which will connect from San Jose to Downtown San Francisco.
Although no price was disclosed for the deal, IQHQ recently completed a $770 million capital raise supporting the real estate investment trust (REIT)’s investment strategy to invest in life sciences projects in top innovation hubs. IQHQ was formerly known as Creative Science Properties. It rebranded in February shortly after raising the $770 million in equity to acquire, develop and operate life sciences properties in the Bay Area, San Diego and Boston, in addition to the UK. IQHQ has offices in San Diego and Boston.
According to CBRE, a U.S.-based real estate services and investment firm, class-A R&D space in South City has an average asking rent of $69 per square foot in the first quarter of this year and a vacancy rate of 0.7%.
Murphy indicates IQHQ is working on rezoning the site to allow for R&D use with hopes of attracting life sciences clients from the area. It is the first IQHQ deal in South San Francisco, although the company’s leadership has plenty of experience in the submarket.
Despite the shelter-in-place orders across the country due to the COVID-19 pandemic, the life sciences sector appears to be thriving, partly because of the gear-up to battle the virus.
“We are being very opportunistic right now and see more opportunity now than we did 90 days ago,” Murphy told the San Francisco Business Times. “We are getting a lot of calls given our liquidities.”
Recent construction projects in South San Francisco include BioMed Realty Trust’s 1.25 million-square-foot Pacific Gateway campus, an Oyster Point Marina campus, another at Britannia Cover by HCP Investment, and Alexandria’s 291,000-square-foot office and R&D campuses.
“The IQHQ leadership team has an excellent track record of making dynamic and large-scale life science projects a reality, and we’re pleased to partner with them on the South City Station project,” said South San Francisco City Manager Mike Futrell. “Despite the impact of the recent COVID-19 pandemic, the life sciences sector and real estate market continues to be a bright spot, and one of the City of South San Francisco is committed to supporting.”
