Trammell Crow Scores $142M for Bioscience Project in South SF

Despite rising vacancy in life science offices, Trammell Crow scored a $141.5 million investment in a proposed 750,000-square-foot research campus in South San Francisco.

The Dallas-based developer quietly secured the equity infusion from Alaska Permanent Fund for its life science development at 120 East Grand Avenue and 180 Sylvester Road, the San Francisco Business Times reported.

The investment, funded by Alaska’s oil and gas reserve revenues, was made last quarter and first reported by IPE Real Assets.

Trammell Crow, a unit of Dallas-based CBRE, bought the 3.5-acre project site last year for $80 million.

The Business Times cited a 500,000-square-foot R&D project. In May, The Real Deal reported plans for a nearly 750,000-square-foot project, including two office towers, plus amenities and parking garage buildings.

Plans call for a 155,000-square-foot,120-foot tall office tower at 120 East Grand Avenue, and a 333,400-square-foot, 216-foot tall tower at 180 Sylvester Road.

The project also includes a 12,400-square-foot amenities building at 123 Sylvester Road, and a 240,000-square-foot parking garage at 125 Sylvester Road.

Alaska Permanent will hold a majority stake in the San Francisco property, while Trammell Crow will serve as the developer and manage day-to-day operations, according to IPE. Construction is expected to begin in the second half of the year, with no tenants currently signed on.

Despite Alaska Permanent Fund’s investment, Trammell Crow says it is proceeding cautiously.

Adam Voelker, who heads the developer’s San Francisco office, told the Business Times there is no set date for the project’s groundbreaking.

“We are positioning the project to be construction-ready and repeatedly analyzing market dynamics for a groundbreaking,” Voelker said in a prepared statement. He declined further comment.

Few of the more than 3 million square feet of life science projects approved east of Highway 101 between fall 2022 and last year have broken ground.

During the pandemic, life sciences leasing, fueled by a flood of venture capital funding, hit unprecedented levels, according to the Business Journal. Large projects on the San Francisco Peninsula were often fully leased as they were built.

But over the past year, office availability within the 11 million-square-foot Northern San Francisco Peninsula submarket, which includes South San Francisco, hit 19.8 percent in the fourth quarter, up from 5.3 percent a year earlier, according to CBRE.

— Dana Bartholomew