SAN FRANCISCO, CA – Oxford Properties Group has acquired four life sciences assets totaling 415,000 square feet, and developable land for $276 million, with anticipated follow on investments of $500 million in the assets.
The acquisitions come as part of Oxford’s strategy to build a life sciences business in an asset class which is benefiting from clear secular trends as well as the exciting convergence of technology and science. Oxford intends to deploy an additional $500 million of capital into these investments through development of new biotech space and converting existing office and retail uses into new lab space at the Bay Area asset and has identified value-add opportunities within the Boston portfolio.
Oxford acquired Emeryville Public Market in a partnership with City Center Realty Partners (“CCRP”), a San Francisco-based real estate developer and investor. The seller was a joint venture between Angelo Gordon and CCRP, and was represented by Newmark’s Steven Golubchik and Nicholas Bicardo. The 148,000 square foot mixed-use project, comprises lab space, retail, food and office use located within the established life sciences cluster of Emeryville in the San Francisco Bay Area. The investment includes 36,000 square feet of ground floor first generation lab space, the popular food hall, and approximately 60,000 square feet of current office and retail space identified for conversion to lab space. The deal also features land parcels that have the potential be developed to add new purpose-built lab product in a market that currently features almost zero availability for lab space.
“Growing a meaningfully sized life sciences business represents one of our highest conviction investment strategies and top priorities across our business,” commented Chad Remis, Executive Vice President, North America at Oxford Properties. “These transactions grow our presence in two key global life sciences markets and complement our existing portfolio of assets and significant development pipeline in the sector. It gives us a solid foundation to continue to grow from as we seek to scale this part of Oxford’s business in 2021.”
“City Center looks forward to our collaboration with Oxford on this project and continuing our successful transformation of Public Market Emeryville from a suburban-style collection of buildings and surface parking lots into a premium mixed-use life science campus in the East Bay,” said Mark Stefan, CCRP President and Co-Founder.
Oxford also recently acquired three assets in the Greater Boston area. 33 New York Avenue is a core, recently completed 114,000 square foot state-of-the-art biomanufacturing facility which is 100% leased to Replimune Group Inc and CRISPR Therapeutics. It also purchased 1 & 5 Mountain Road, two adjacent buildings that comprise 153,000 square feet and are currently leased in their entirety to Sanofi. It has identified significant value-add opportunities for 1 & 5 Mountain Road.
Oxford’s push into Life Sciences in North America will initially focus on Boston, the San Francisco Bay Area, San Diego, and other emerging locations that Oxford has early excitement over. Beyond North America, Oxford is also reviewing opportunities across Europe as it looks for global exposure to the asset class. Over the past few years it has built expertise in the space and deployed capital into the sector through a variety of equity and credit investments.
“Growth in this asset class is being driven by a number of tailwinds. Aging populations are a demographic engine, however the need for new treatments, diagnostics and equipment goes beyond that trend alone. Technology and science are converging with advances in data analytics and AI that is accelerating life-changing innovations across biotech, pharmaceuticals, nutrition and medical devices. As a result of this shift, private equity and venture capital funding for promising products and companies has markedly increased in recent years. This surge of activity and the formation of new and growing companies is taking place against the backdrop of a limited supply of lab infrastructure in the sector’s key global markets,” added Remis.