DivcoWest acquired a vacant office and research building and an adjacent strip of land in South San Francisco and plans to convert the waterfront property into labs, its latest move in the Bay Area’s thriving life science real estate sector.
The real estate investment firm paid $164.5 million to buy the building at 5000 Shoreline Court and a swath of land immediately east of it from Johnson & Johnson, according to real estate database PropertyShark. The three-story building, which totals more than 143,000 square feet, is located in a major regional life science cluster called Sierra Point, a DivcoWest spokesperson said in an email. The Mercury News reported details of the deal earlier. It was recorded with the San Mateo County Clerk-Recorder’s Office on Jan. 7.
The site previously housed employees of several different Johnson & Johnson business units and subsidiaries before the healthcare company shuttered its facility there last year. San Francisco-based DivcoWest plans to reposition it for life science companies. It intends to turn offices into labs, install a new generator system and lab-quality heating, ventilation and air conditioning, as well as renovate its main entryway, common areas and elevator lobbies, a spokesperson said in an email.
The firm will fit out the lab and research suites without waiting to line up tenants first to allow for occupancy as early as the first quarter of next year, the spokesperson said. It’s unclear what DivcoWest plans to do with the 1.6-acre slice of vacant land it bought, which includes part of the San Francisco Bay Trail.
DivcoWest has been leasing and buying life science real estate in the Bay Area in recent months, part of a nationwide portfolio of such properties that it’s been building over the last few years, the spokesperson said. The firm signed a long-term lease with Procept Biorobotics, a maker of surgical robotics, at the end of December. Procept agreed to rent about 158,000 square feet across two buildings in North San Jose owned by DivcoWest and Liberty Mutual Group, and will shift its headquarters from Redwood City to there.
The firm also bought a manufacturing facility in Fremont in the East Bay last month for about $72 million that its previous owners planned to revamp to use for life science tenants, according to Old Republic Title records and the Silicon Valley Business Journal. The 100,000-square-foot property is more than 60 percent leased to Alexza Pharmaceuticals, and DivcoWest is looking for life science and research-related businesses to take the rest of it, the spokesperson said.
[The Mercury News] — Matthew Niksa