South City properties sold in $2.9B deal

The $2.9 billion acquisition of a major property investor’s landholdings — most of which are in South City’s biotech sector — should bring a change to the city’s bottom line.

But the required re-evaluation of the property is not expected to bring a windfall to South San Francisco despite the land deal’s humongous price tag, officials said.

Health Care Property Investors Inc. announced Monday the nearly $3 billion purchase of Slough Estates USA Inc., whose clients in South San Francisco include biotech heavyweights Genentech and Amgen.

The acquisition includes 83 existing properties of roughly 5.2 million square feet and roughly 3.8 million square feet of space in the pipeline for development. Slough Estates has numerous land holdings in the Oyster Point area, including the Britannia Oyster Point and Britannia East Grand developments; 42 percent of its U.S. property is in South San Francisco.

In South San Francisco, Slough currently has 2.4 million square feet of mostly research and development space either under construction or under review for future building, according to information provided by the city’s Planning Department.

With Health Care Property Investors taking over Slough’s extensive land holdings, the property will be reassessed. When property changes ownership, San Mateo County reassesses the property’s value, which in turn affects the property taxes the owner pays.

Assistant City Manager Marty Van Duyn said the reassessment would not likely bring in a significant dollar amount to the city because most of the buildings were recently built and are not outdated.

“I don’t expect a windfall,” Van Duyn said. “I’m not so sure that it’s going to bethat significant.”

Management of the properties is likely to stay in place, so South San Francisco did not expect too much to change as far as how aggressive Health Care Property investors would be in the future, Van Duyn said.

That lack of impact extends to the entire life science and biotechnology real estate market in the area, said Gregg Domanico, a managing partner with NAI BT Commercial, a commercial real estate firm. The demand for biotech property will continue to be “very strong,” he said.

“It’s just a big price tag,” Domanico said. “It’s all good product … it’s a good deal.”

Jay Flaherty, the chairman and CEO of Health Care Property Investors, said in the announcement that the two sides had been discussing a deal since 2003.

dsmith@examiner.com

businessLocalScience & TechnologyScience and Technology

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

A man holds a sign at a rally to commemorate the life of George Floyd and others killed by police outside City Hall on Monday, June 1, 2020. (Kevin N. Hume/S.F. Examiner)
Chauvin verdict: SF reacts after jury finds ex-officer guilty on all charges

San Franciscans were relieved Tuesday after jurors found a former Minneapolis police… Continue reading

School Board member Faauuga Moliga, right, chats with Superintendent Vincent Matthews in between greeting students on the first day of in-person learning at Bret Harte Elementary School on Monday, April 12, 2021. (Kevin N. Hume/S.F. Examiner)
Faauuga Moliga named as school board vice president to replace Alison Collins

The San Francisco school board on Tuesday selected board member Fauuga Moliga… Continue reading

Legislation by Supervisor Rafael Mandelman would require The City to add enough new safe camping sites, such as this one at 180 Jones St. in the Tenderloin, to accomodate everyone living on the street. (Kevin N. Hume/S.F. Examiner)
City would create sites for hundreds of tents under new homeless shelter proposal

Advocates say funding better spent on permanent housing

A construction worker rides on top of materials being transported out of the Twin Peaks Tunnel as work continues at West Portal Station on Thursday, August 16, 2018. (Kevin N. Hume/S.F. Examiner)
SFMTA’s poor track record on capital projects risks losing ‘public trust’

Supervisors say cost overruns and delays could jeapordize future ballot revenue measures

Roger Marenco, president of operators union TWU Local 250-A, speaks at a news conference outside the Muni Kirkland Yard announcing Muni will not be increasing fares on Wednesday, June 10, 2020. (Kevin N. Hume/S.F. Examiner)
SFMTA’s union leader encourages riders to say ‘thank you’ to their Muni operators

A conversation with Roger Marenco, president of Transport Workers Union of America, Local 250A

Most Read