SOUTH SAN FRANCISCO — A major revamp and conversion to a life sciences complex is in the works for a South San Francisco building that was bought this year by a veteran Bay Area developer.
The upgrade will occur at an existing office building at 5000 Shoreline Ct. in South San Francisco, which DivcoWest, a big developer, bought in January 2022 for $164.5 million.
DivcoWest has landed $124 million in financing for the project, according to CBRE, a commercial real estate firm that arranged the funding for the office complex.
A wide-ranging upgrade is in the works for the office building, which totals 138,400 square feet, according to CBRE.
CBRE brokers Mike Walker and Brad Zampa with the company’s debt and finance unit arranged the funding for the purchase and the upgrade.
“The fundamentals in the Bay Area life sciences market are incredibly strong,” said Walker, a CBRE executive vice president.
DivcoWest intends to convert the existing structure to a modern office building suitable for life science, biotech, or pharmaceutical companies. Utilities, electrical and mechanical components also will be upgraded.
The building improvements are expected to transform it into a complex with office spaces and laboratory suites that will be ready for life science firms.
The 5000 Shoreline office building, which occupies 8.6 acres, is one of the few remaining buildings in South San Francisco that are suitable for conversion to life sciences.
The biotech, life science and pharmaceutical sectors are maintaining a big appetite for space at a level that outpaces the existing supply of buildings.
At the end of 2021, Bay Area life sciences buildings posted a 2% vacancy rate, CBRE research determined.
An estimated 54 tenants are currently scouting for life science space and are seeking a combined total of 2.6 million square feet of this type of building product, according to CBRE.
As a result, “multiple” banks with hefty balance sheets competed to provide the financing for the project, according to CBRE.
Deutsche Bank, a Germany-based investment banking behemoth, provided the financing, documents filed on March 24 with the San Mateo County Recorder’s Office show.
The South San Francisco site occupied by the Shoreline Court building is deemed to be an excellent life sciences location.
“This location is central to the top biotech and pharma companies in the region,” Walker said.
