Morgan Stanley has put up for sale a $106 million loan connected to the Ratio Innovation Campus, a research and development complex in Emeryville. The note, which is backed by the two-building property, may allow a buyer to take ownership of the site through a deed-in-lieu of foreclosure, according to reporting from the San Francisco Business Times.
Beacon Capital Partners acquired the 240,916-square-foot campus at 6401 Hollis Street and 1480 64th Street in 2021 from BentallGreenOak for $130 million. At that time, Beacon secured a floating-rate loan exceeding $106.4 million from Morgan Stanley with intentions to update the facility for life sciences tenants. The loan is scheduled to mature in March.
As part of its repositioning strategy, Beacon renamed the site from Hollis Business Center to Ratio Innovation Campus in 2022 and invested more than $39 million in building upgrades, mechanical improvements, amenities, and common areas.
The market environment has shifted since Beacon’s purchase. Funding for life sciences and biotech was strong at that time. However, after President Donald Trump took office last year, federal funding for these sectors declined significantly. This reduction led to decreased demand for life sciences real estate. In the fourth quarter, CBRE data cited by the Business Times indicated that Emeryville’s R&D market had a vacancy rate of 43 percent—substantially higher than the East Bay corridor’s overall life sciences vacancy rate of 28.5 percent.
Currently, Ratio Innovation Campus is about 71 percent leased across six tenants; roughly half are life sciences firms such as Totus Medicines and Arcadia Science. Other occupants include Rocky Mountain Cancer Center medical facility, Whole Foods Market’s office operations, and LifeStance Health.
It remains uncertain if or when Ratio Innovation Campus will be offered for sale or what its potential price might be. Last month saw Blackstone list another Emeryville property—the EmeryTech campus at 1400 65th Street—for sale in a short transaction expected to close below its outstanding debt amount.
“Whether the Ratio Innovation Campus itself hits the market — and for what price — remains to be seen,” wrote Chris Malone Méndez.
