Alternative Investment

Goldman Sachs Asset Management and Lane Partners Announce Recapitalization of Southline Phase I with Beacon Capital Partners

First Phase of State-of-the-Art Life Science Campus to Feature Two High-Quality, Purpose-Built Life Science Buildings Conveniently Located Adjacent to Highly Accessible Public Transit Options, Including BART and Caltrain

NEW YORK, Jan. 18, 2023 /PRNewswire/ — A joint venture between the Real Estate business within Goldman Sachs Asset Management (“Goldman Sachs”) and Lane Partners (“Lane”) today announced the completion of a recapitalization of Southline Phase I, a leading, transit-oriented life science development in South San Francisco. As part of the recapitalization, an affiliate of Beacon Capital Partners (“Beacon”), a leading real estate developer, owner, and manager of life science and office properties, has joined the ownership group for the first phase of development. The project has also secured construction financing from Square Mile Capital and Bank OZK. Financial terms of the recapitalization and financing were not disclosed.

A rendering of the first phase of Southline, a state-of-the-art life science campus.

A rendering of the first phase of Southline, a state-of-the-art life science campus.

Centrally located in South San Francisco within walking distance of both the Bay Area Rapid Transit (BART) and Caltrain transit lines, the state-of-the-art, LEED Gold Southline development consists of an aggregated 31 acres with entitlements to build a total of 2.8 million square feet. Goldman Sachs and Lane began assembling the land for the Southline development in October 2017, with the overarching goal to build one of the most innovative and sophisticated life science-focused developments in the country.

The new ownership team has started construction on the first of two buildings in Phase I which will total more than 715,000 square feet. The project is designed to suit the needs of the world’s most innovative life science and technology tenants. Phase I will also include a stand-alone amenity building featuring a fitness center, restaurant, and café, as well as a parking garage.

“We are thrilled to form a new partnership and bring our collective development expertise to begin construction on the first phase of a project that we believe will provide life science and technology companies with best-in-class space,” said Michael Ungari, partner, Goldman Sachs. “It is exciting to be able to move forward with a large-scale development despite a volatile market environment, and we believe the quality of our ownership team and lenders allowed us to do so.”

“The completion of recapitalizing Phase I of Southline is an extraordinary milestone for the project and we could not be more excited about the first phase of development and the caliber of this new partnership,” said Marcus Gilmour, principal at Lane Partners. “Southline is a generational campus located in one of the premier life science clusters in the world and, as such, will provide excellent transit optionality, numerous amenities, and the ability to accommodate tenant growth and expansion within the campus. We are very much looking forward to seeing Southline come to life.”

“We believe in the long-term strength of the Bay Area market and are very pleased to partner with the experienced teams at Goldman Sachs and Lane to help bring the vision of Southline to life,” said Fred Seigel, president and chief executive officer of Beacon. “The South San Francisco location and direct access to the San Bruno BART station truly sets it apart. The scale and innovative approach of the development has unmatched potential to accommodate future growth of tenant companies, making it an optimal choice for leading companies.”

Eastdil Secured advised Goldman Sachs and Lane on the recapitalization and arranged the construction financing.

“This development presented a unique and compelling opportunity to bring together exceptional sponsors to invest in a visionary development that we believe has the potential to change the landscape in one of the most dynamic and innovative life science markets in the country,” said Paul Nelson, managing director at Eastdil Secured. “Southline will be a model for premier biotechnology campuses across the U.S., and we are pleased to have supported the joint venture in achieving this critical milestone for the first phase of the development.”

About Goldman Sachs Asset Management
Bringing together traditional and alternative investments, Goldman Sachs Asset Management provides clients around the world with a dedicated partnership and focus on long-term performance. As the primary investing area within Goldman Sachs (NYSE: GS), we deliver investment and advisory services for the world’s leading institutions, financial advisors and individuals, drawing from our deeply connected global network and tailored expert insights, across every region and market—overseeing more than $2 trillion in assets under supervision worldwide as of September 30, 2022. Driven by a passion for our clients’ performance, we seek to build long-term relationships based on conviction, sustainable outcomes, and shared success over time. Goldman Sachs Asset Management invests in the full spectrum of alternatives, including private equity, growth equity, private credit, real estate and infrastructure. Established in 1991, the Real Estate business within Goldman Sachs Asset Management is one of the largest investors in real estate with over $50 billion in capital invested since 2012 across the spectrum of investment strategies from core to opportunistic. Our global team invests across all sectors with deep expertise across the capital structure, in assets ranging from single properties to large portfolios, through senior mortgages, mezzanine debt and equity. Follow us on LinkedIn.

About Lane Partners
Lane Partners specializes in transforming and developing institutional quality real estate in Northern California by restructuring and repositioning, with the imagination to bring new access and new value. Through smart acquisition, development and management, Lane Partners has transformed millions of square feet of Silicon Valley real estate into properties that perform. Since 2006, Lane Partners has been the local force that makes global waves.

About Beacon Capital Partners
Beacon Capital Partners (“Beacon”) is a leading private real estate investment firm, owning and operating office and life science properties. The firm has a 75-year legacy of successful real estate development, management, and transformation of workplaces. Since 1998, Beacon has raised ten commingled investment vehicles, as well as multiple joint venture vehicles and co-investments, totaling over $19 billion of equity capital commitments from public and corporate pension funds, financial institutions, endowments, foundations, and other U.S. and non-U.S. institutional investors. Today, Beacon manages over $14 billion of real estate and owns and operates a portfolio spanning more than 29 million square feet across 14 U.S. markets. For more information, please visit beaconcapital.com.

About Bank OZK
Bank OZK (Nasdaq: OZK), through its Real Estate Specialties Group (RESG), provides financing on commercial real estate projects throughout the nation. RESG is considered a preeminent, market-leading construction lender focused on senior secured financing for a variety of property types including mixed use, multifamily housing, condominiums, office, hospitality, life sciences, industrial and retail. During the five years ended September 30, 2022, RESG originated approximately $39.33 billion in new loans. For more information, visit www.ozk.com.

About Square Mile Capital Management LLC
Square Mile Capital Management LLC is an integrated institutional real estate and investment management firm based in New York. The firm has an established history of successful investing in commercial real estate at all points in the market cycle.  Square Mile Capital’s experience supplying flexible equity and debt capital solutions in diverse property sectors and across the risk spectrum, combined with its integrated national sourcing and investment platform, facilitates the creation of value for its investors, partners, borrowers and counterparties. Square Mile Capital’s commercial real estate debt platform provides customized capital solutions for real estate owners and developers throughout the United States utilizing its broad investment platform, product expertise and research resources. The firm seeks to identify the impact of long-term trends on real estate values and target its equity investments on key investment strategies likely to benefit from such trends.  For more information, visit www.squaremilecapital.com.

Contacts

Goldman Sachs
Avery Reed
avery.reed@gs.com
(o) 212-902-5400

Lane Partners:
Marcus J. Gilmour
marcus@lane-partners.com
(o) 650-665-7085

Beacon Capital Partners
Maureen Richardson, River Communications
mrichardson@riverinc.com
(o) 914-686-5599
(c) 914-434-6033

Eastdil Secured
Jack Kelleher / Erik Carlson
Joele Frank, Wilkinson Brimmer Katcher
(o) 212-355-4449

Cision

Cision

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SOURCE Goldman Sachs Asset Management; Lane Partners; Beacon Capital Partners

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