Citizens Bank Provides $185M Loan for SF Office Tower

Phase 3 Real Estate utilized the funds to refinance Genesis South Tower, a 336,400-square-foot lab and office property located within a three-building life sciences development.
Image credit: Yardi

Genesis South Tower, a 336,400-square-foot lab and office building in South San Francisco, has been refinanced to the tune of $185 million. Citizens Bank provided the loan for Phase 3 Real Estate Partners Inc., owner of the 12-story building, acting as the sole lead arranger and administrative agent. 

“The Genesis South Tower deal highlights Citizens’ strong commitment to helping its commercial clients reach their potential as well as Citizens’ capabilities and support of clients based on the West Coast,” Gary Magnuson, head of commercial real estate finance for Citizens Bank, said in a prepared statement.

Carrying the address of 1 Tower Pl., South Tower is part of the 715,000-square-foot Genesis, a 21-acre life sciences development which, in addition to the nine-year-old South Tower, encompasses the recently completed Genesis North Tower office and lab building, and a 6,000-square-foot retail amenity building due to deliver in winter 2018. Phase 3 acquired the Genesis development in 2015, paying $162 million for South Tower and an additional $58 million for the two pads designated for the 21-story North Tower and the single-story retail building.

Today, South Tower is fully stabilized with a tenant roster that comprises a bevy of businesses, including biopharmaceutical company Achaogen, human resources software firm SuccessFactors and biochemicals company Corbion, which signed a 32,400-square-foot lease orchestrated by commercial real estate services firm Newmark Cornish & Carey in November 2017.

The Citizens financing for South Tower consists of a five-year, floating-rate loan arranged by commercial real estate and capital markets services provider HFF, which also secured a $199.9 million loan through a life insurance company for North Tower.

FINANCING FRENZY

Numerous real estate companies have been on the receiving end of Citizens’ financing packages this year. While Citizens is eager to expand its presence in major West Coast markets in 2018, the company continues to provide loans across other regions of the U.S. Citizens’ larger transactions within the last few months include a $93.5 million loan for Oaktree Capital Management’s $134 million purchase of a 33-story office high-rise in Charlotte, N.C.., and financing for Innovatus Capital Partners’ acquisition of a $56 million office property in Durham, N.C. And on the multifamily side, Citizens came through with a $58 million to Douglas Development Corp. for a 295-unit project in Washington, D.C.

“Providing loans is just one of the ways that the Commercial Real Estate team is helping clients,” Magnuson said.