Site near Caltrain sells despite slump
Biotech focus key for future apartment complex in South S.F.
A site near the future South San Francisco Caltrain Station has been sold at a time when most commercial real estate transactions are paralyzed by the uncertainties of the coronavirus pandemic.
IQHQ, a real estate developer that specializes in biotech, bought 580 Dubuque Ave., where a 213,000squarefoot life science complex is planned. The company, headquartered near San Diego, previously raised $770 million for projects.
The previous owner, Republic Urban, had submitted an application for city approvals in February. It will likely take another year to win approvals, although IQHQ will start talking to prospective tenants later this year, according to President Tracy Murphy.
“Our business plan is to do iconic development dedicated to life sciences in neighborhoods that have a mix of opportunities to live, work and play,” she said. “This site squarely meets all of our objectives.”
Murphy said biotech remains as active as it was prior to the coronavirus shutdown. As long as the health crisis persists it’s likely that capital will continue to flow into the sector from philanthropic, government and private sources.
“We are feeling really good about the life science industry right now,” Murphy said. “We don’t think there is a brighter spot around the industry right now.” Murphy was previously head of biotech at Kilroy Realty, one of San Francisco’s biggest office landlords.
The price of the sale couldn’t immediately be verified in public records.
South San Francisco City Manager Mike Futrell agreed with Murphy’s assessment.
“We have talked with all our major biotech players in South San Francisco and they are incredibly busy right now,” said Futrell. “Many are engaged in
research and development related to COVID19 — testing or potential vaccines or treatments. We have seen no slowdown at all in the biotech space.”
The building is part of downtown South San Francisco’s redevelopment plan, which will bring 4,000 housing units to the neighborhood. Three housing complexes have already opened and three more are under construction — all which will be within walking distance of the new Caltrain station as well as the IQHQ building. The new Caltrain station, which is under construction and is slated to open in 2021, is a few hundred yards from the current station.
“This creates a lot of opportunity for synergies,” said Futrell. “This is a prime location for a jobs center where people can also live and take transit.”
A recent survey by the brokerage Cushman & Wakefield found that onethird of all commercial real estate deals — leases and property sales — are indefinitely on hold and onethird are being renegotiated to reflect the weaker economic forecast. The last third, which are going forward as planned, are all biotech or health care deals.
Biotech developments in South City include Kilroy Oyster Point, a 2.5 millionsquarefoot development, a portion of which will include Stripe’s new headquarters.