Healthpeak Properties Receives Entitlements for an Additional 1.3 Million Square Feet of Development at the Vantage Campus in South San Francisco
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The approval of entitlements for Phases II and III of Healthpeak Properties' Vantage lab development campus marks a significant expansion in the company's real estate portfolio. With an additional 1.3 million square feet of lab space, the total capacity of the campus will reach approximately 1.7 million square feet. This development is noteworthy for its potential to attract biotech firms, given its proximity to Genentech and the broader South San Francisco biotech hub.
The strategic location and the enhanced amenities are designed to foster a collaborative environment, which is crucial for tenants in the biotech sector. The flexible phasing of the development allows Healthpeak to align supply with market demand, potentially optimizing occupancy rates and rental income over time. The existing 52% lease of Phase I by Astellas Pharma indicates a strong initial demand for such specialized real estate.
For stakeholders, the long-term nature of these entitlements could imply sustained revenue growth as the campus develops. However, the success of this venture hinges on the continued expansion and financial health of the biotech industry. A downturn in this sector could lead to increased vacancy rates and reduced rental income for Healthpeak.
Healthpeak's announcement is poised to have a material impact on its financials due to the scale of the project and its significance within the biotech real estate market. Doubling the allowable density of the development could lead to a substantial increase in Healthpeak's asset base and revenue potential. The project's alignment with market demand and the existing relationship with the City of South San Francisco suggest a favorable regulatory environment and potential for streamlined development processes.
Investors should monitor the progress of leasing activities as a barometer for the project's success and Healthpeak's operational efficiency. Additionally, the capital expenditure required for such a large-scale development must be weighed against the expected returns from leasing activities. The company's ability to secure tenants and manage development costs will be critical in determining the project's impact on Healthpeak's stock performance.
The expansion of Healthpeak's Vantage campus is a strategic move within the biotech real estate sector. South San Francisco is a key nexus for biotechnology firms and the development's amenities and location are likely to be highly attractive to potential tenants. The direct access to transportation and the pedestrian connection to local amenities are significant value propositions that could set Vantage apart from other developments.
In the broader context, the biotech industry's growth trajectory and the demand for specialized lab spaces are critical factors that could influence the success of the Vantage campus. While the current leasing status is promising, the long-term viability of the campus will depend on the sustained growth and innovation within the biotech sector. As biotech companies continue to evolve, the need for flexible and state-of-the-art lab spaces like those offered at Vantage could become increasingly important.
Rendering of Vantage Campus Phases II & III by Flad Architects (Graphic: Business Wire)
The newly awarded entitlements provide Healthpeak the ability to deliver an additional 1.3 million square feet of lab space, bringing the combined campus to approximately 1.7 million square feet upon full buildout. These entitlements represent double the allowable density compared to when Healthpeak originally acquired the land. The long-term nature of the entitlements offers flexibility to deliver the balance of the development in phases to align with market demand.
Strategically located in the heart of South San Francisco and at the doorstep of Genentech’s headquarters, the 20-acre purpose-built lab campus offers tenants a highly amenitized, world-class campus setting with access to multiple modes of transportation including direct access to the Rails-to-Trails pathway, which provides a pedestrian connection to downtown South San Francisco's restaurant and retail corridor, as well as the Caltrain station, which recently completed a multi-year renovation.
“Inspired by our success at The Cove and other nearby campuses, the Vantage master plan is a continuation of Healthpeak’s vision to create a world class campus that provides an inviting and collaborative setting for the nurturing of ideas, knowledge, and discoveries that shape the biotech industry,” said Scott Bohn, Healthpeak’s Chief Development Officer and Co-Head of Lab. “The future phases of Vantage provide Healthpeak a strategic development pipeline to meet the growth needs of our current and future tenants.” Mr. Bohn continued, “We’re appreciative of the collaborative and mutually beneficial relationship we have fostered with the City of South San Francisco over the past three decades and look forward to Vantage furthering South San Francisco’s position as a leading market for biotech innovation.”
In 2022, Healthpeak commenced construction on Phase I of the Vantage campus, consisting of 343,000 rental square feet across two buildings, as well as a 40,000 square foot amenity building featuring multiple dining options, conferencing space, and a fitness center. Phase I is currently
For additional information on the campus, please visit the Vantage website at https://vantagessf.com/.
ABOUT HEALTHPEAK PROPERTIES
Healthpeak Properties, Inc. is a fully integrated real estate investment trust (REIT) and S&P 500 company. Healthpeak owns, operates, and develops high-quality real estate for healthcare discovery and delivery. For more information regarding Healthpeak, visit www.healthpeak.com.
FORWARD-LOOKING STATEMENTS
Statements in this release that are not historical factual statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include those regarding the development of Vantage. All forward-looking statements are made as of the date hereof, are not guarantees of future performance and are subject to known and unknown risks, uncertainties, assumptions and other factors — many of which are out of Healthpeak's and its management's control and difficult to forecast — that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. These risks and uncertainties include but are not limited to: Healthpeak's ability to commence and complete the development, or portions thereof, to align with market demand; the risk that Healthpeak may not be able to achieve the benefits of the development within expected timeframes or at all, or within expected cost projections; and other risks and uncertainties described from time to time in Healthpeak's Securities and Exchange Commission filings. You should not place undue reliance on any forward-looking statements. Healthpeak assumes no, and hereby disclaims any, obligation to update any forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231219454231/en/
Andrew Johns, CFA
Senior Vice President – Investor Relations
720-428-5400
Source: Healthpeak Properties, Inc.
FAQ
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