The Pointe’s Buy Shows Life Science Predominance
The Bay Area life science market comprises 32 million square feet, with 5 million square feet under construction. Current demand for life science product in the Peninsula is driven by the overall growth of the industry sector in a severely supply-constrained market.
A recent example of that demand is exemplified in the acquisition of The Pointe, a two-building life science and office property located at 1201 and 1235 Radio Rd. in Redwood City. The property totals 89,145 square feet across the two class-A life science/office buildings.
CBRE capital markets’ debt and structured finance secured the $17.25 million financing. The San Francisco-based CBRE team led by Mike Walker and Brad Zampa arranged the seven-year balance sheet bank financing on behalf of the sponsor, GI Partners. The financing CBRE secured consisted of a seven-year full-term interest-only loan priced very competitively over 30-day LIBOR.
“The finance markets are incredibly aggressive for stabilized life science right now as lenders are generally under allocated to this dynamic asset class,” said Mike Walker of CBRE. “The fundamentals for this use in this location are some of the best in the United States. Those two dynamics coupled with the best-in-class sponsorship of GI Partners resulted in a very favorable outcome.”
The average asking lease rate range for life science product in the Bay Area ranges from $4.75 NNN to $5.75 NNN, depending on the location and quality of the asset.
The Pointe is in the midst of the emerging mid-Peninsula life science cluster. Life science companies including 23andMe, Amgen, Gilead Sciences, Illumina, Natera and Roche are near the property.