Kilroy Realty Co. has started construction on the second phase at Oyster Point, a premier life science campus on 50 acres in South San Francisco. One of five, the second phase will feature thee buildings totaling 860,000 square feet and represents an investment of $940 million.
Once complete, Oyster Point will total 3 million square feet and will cater to biotechnology and pharmaceutical tenants. The second phase will include a fitness facility, conference center and several food and beverage options as well as outdoor meeting areas like a large amphitheater and recreation areas.
Kilroy acquired the fully entitled land site in 2018 to expand its life science business. South San Francisco has evolved into a thriving tech and life science hub, and several other developers are planning major projects in the area. In May, Phase 3 Real Estate Partners and Bain Capital Real Estate secured more than $400 million in construction financing for Genesis Marina, a 8.7-acre 570,000-square-foot life science campus in Brisbane, a life science cluster in South San Francisco. The mature market is rated second in the country for life science, and as a result there is limited new development activity.
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Kilroy is making a lot of moves in its life science segment. In May, Kilroy sold the Exchange on 16th, a 750,000-square-foot office complex in San Francisco's Mission Bay submarket, to KKR for slightly more than $1 billion. At 1,440 per square foot, the sale is the highest per-square-foot sales price for a property in the San Francisco commercial real estate market. Kilroy built the property in 2018 as a center for life sciences and technology on the West Coast, and it has LEED Platinum and WELL Core & Shell Gold certifications.
In addition, Kilroy is actively expanding in San Diego. The developer has three San Diego sites fully entitled for more than 700,000 square feet of life science development, and it is developing premium life science space that will capture the increasing demand in the market. It is currently under development on Santa Fe Summit, along the Route 56-Corridor, and 9514 Towne Centre Drive and 4690 Executive Drive that are located in the University Towne Center submarket.
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Kelsi Maree Borland
