Built in 1964, Peninsula Life Science Center is 98 percent occupied by biotech tenants
The US real estate platform of Gemini Investments has made its first foray into the life sciences market by picking up a biotech-oriented office building in the San Francisco Bay area for about $59.4 million, at the same time that the Hong Kong-based private equity firm is selling a trio of office properties in Nashville, Tennessee.
Gemini Rosemont Commercial Real Estate acquired Peninsula Life Science Center, an eight-storey property with 65,804 rentable square feet (6,113 square metres) in the San Francisco Peninsula city of Burlingame, for about $59.4 million, the company announced Wednesday. On the following day, Gemini Investments said in a filing to the Hong Kong stock exchange that its US subsidiary had sold the Nashville assets for a total price of $41.5 million.
Headquartered in Los Angeles, Gemini Rosemont is a joint venture real estate platform backed by Gemini Investments, which is controlled by Chinese state-run property giant Sino-Ocean Land. The US company was formed in 2015 by an agreement between Gemini Investments and Albuquerque’s Rosemont Realty.
The California deal provides Gemini Rosemont with a foothold in the resilient life sciences real estate niche and boosts the company’s existing portfolio of 17 office properties across seven US states, as the firm looks to expand further in California’s Bay Area.
Buying Into a Biotech Hub
Located at 1828 El Camino Real, Peninsula Life Science Center was built in 1964 and renovated twice, in 2016 and this year, when it underwent $11 million in capital and tenant improvements. Commercial real estate firm Sansome Street Advisors and liquidation specialist Gordon Brothers sold the property to Gemini Rosemont in an all-cash deal.
Jason Kuester, chief operating officer of Gemini Rosemont
The building is almost fully leased to three life science tenants. Featuring floor-to-ceiling windows with views of the San Francisco Bay, the property is a five-minute walk from the Millbrae transit station serving the Bay Area Rapid Transit (BART) system and Caltrain commuter rail line.
Gemini Rosemont’s acquisition fits the company’s strategy of growing its West Coast portfolio with quality assets, the company’s chief operating officer Jason Kuester noted in a statement. “We see it as the foundation to expanding in the life sciences sector.”
Burlingame is an active life sciences market, which like its Peninsula neighbours Daly City and San Bruno, has benefitted from spillover demand from the prime biotech hubs of South San Francisco, Foster City, and San Francisco’s Mission Bay neighbourhood.
This past February, Boston biotech developer King Street Properties spent $45 million to purchase a two-story office building at 1699 Old Bayshore Highway in Burlingame, where the company plans to build a 485,000 square foot life sciences development, slated to deliver in 2024.
Just down the Bayshore Freeway from Gemini Rosemont’s newest acquisition, Kylli, a subsidiary of Shenzhen-based developer Genzon Investment Group, has built a state-of-the-art, four-building office and life sciences campus dubbed Burlingame Point, which is now fully leased to Facebook.
Although Kylli offered to reconfigure the property’s two life sciences buildings for traditional office use, Facebook reportedly opted for flexibility in the future by finishing out the pair of buildings as originally designed, according to a 2020 account by Commercial Observer.
Leaving Music City
Over in Tennessee, Gemini Rosemont agreed to sell Lakeview Place, a trio of neighbouring low-rise office buildings, to OakPoint Capital Partners, a real estate investment firm with offices in Nashville and Austin. Gemini Rosemont expects to record a roughly $9.3 million loss on the $41.5 million sale upon closing.
The grade A buildings measure a total of 382,164 square feet at 14, 22, and 25 Century Blvd, within the Century City office park near Nashville’s international airport. Constructed between 1986 and 1998, the five- and six-storey buildings have space available for $24.50 or $25.50 per square foot per year, according to property listings on CommercialCafe.
Gemini Rosemont’s sale comes as the company looks to gradually shed assets in central US markets while focusing on “coastal gateway, technology-driven, and selected markets” with compelling fundamentals, high liquidity and improving demographics, most of which are located on the East and West Coasts, the company indicated in the filing.
Gemini Rosemont, which has spent about $720 million buying over 1.4 million square feet of class A office buildings in the US since March 2016, has tended to favour mid-sized deals while keeping a lower profile than many cross-border investors hailing from China.
The company announced the pair of transactions in the same week that Beijing-based builder China Oceanwide Holdings disclosed it had once again failed to sell its stalled $1.6 billion San Francisco mega-project, Oceanwide Center, which was seized by creditors last year.
Leave a Reply