Ping An JV buys San Francisco development for $171m

A quadruple Chinese joint venture plans to invest $1bn to develop a biotechnology and life sciences campus.

A Chinese joint venture that includes Ping An Insurance has made an investment in the first step of a $1 billion development project that will bring a biotechnology and life sciences campus to San Francisco, according to a Thursday announcement.

The quadruple joint venture bought Oyster Point Business Park, a waterfront development site on South San Francisco’s Oyster Bay, for $171 million and group of investors plan to ultimately invest $1 billion in the biotech industrial park, according to media reports. The group is led by the local arm of Chinese developer Greenland Group, which has a 49 percent stake, according to real estate data provider Real Capital Analytics. Ping An, China’s second-largest insurer, holds a 36 percent interest, while developer Agile Group has a 10 percent stake and investment firm Poly Sino Capital is taking a 5 percent interest.

The JV bought the 42-acre property from Shorenstein Properties, a San Francisco-based private equity real estate firm, and SKS Partners, a local developer. The sellers acquired the site in 2008 for $84 million, according to RCA. The duo’s equity stakes were not disclosed, but PERE understands that capital for Shorenstein’s interest came from Shorenstein Realty Investors IX, a $2 billion value-added fund launched in 2007 and closed in 2008. Investors in the fund include the North Carolina State Treasury, which earmarked $75 million; the University of Texas Investment Management Company, which allocated $50 million; and the University of Michigan, which invested $35 million, according to PERE research.

San Francisco was the third most popular destination for Chinese capital over the last year by volume, behind Manhattan and Chicago, according to RCA. The city saw $1.8 billion in Chinese capital invested in the last 12 months, compared with Manhattan’s $5.3 billion. Oyster Point Business Park is Ping An’s first deal in San Francisco, according to RCA.

The new owners plan to build 2.3 million square feet of development, including public open space, according to Thursday’s statement. Construction on the project is expected to begin in mid-2018.

“Our vision is to further cement South San Francisco's role and reputation as the world's leading biotech hub by creating a best-in-class campus that will stimulate and sustain its economic and social fabric,” said Taotao Song, Greenland USA’s executive vice president, in Thursday’s statement.

The sellers were represented by JLL and the buyers by Kidder Matthews.