Peninsula biotech space feels global pharma blues

Compugen's Mary Haak-Frendscho.

The patent expirations and capital efficiency trends sweeping through the global drug industry are playing out in companies’ local real estate decisions. That direction may not bode well in the short term for landlords and developers of biotech space on the Peninsula, with large biopharmaceutical companies buying tiny biotechs and consolidating multiple, smaller locations. But a new generation of biotech companies stands ready to take bits and pieces of the newly available space.

BioMed plans 2 biotech buildings in South San Francisco

BioMed Realty Trust is placing a new biotech bet in South San Francisco, planning two buildings that would extend a potential 1.2 million-square-foot campus. The San Diego REIT has submitted plans to South San Francisco officials to construct two four-story office and lab buildings totaling 260,000 square feet along Eccles Avenue, said South San Francisco economic development coordinator Mike Lappen.

BioMed, Genentech swap Peninsula properties

BioMed Realty Trust Inc. is extending its reach down the Peninsula as it expands in South San Francisco. The San Diego-based REIT (NYSE: BMR) has plans in front of South City to tear down the former Ocular Sciences building on Eccles Avenue to build two four-story lab and office buildings totaling 260,000 square feet. (See the story in this week’s San Francisco Business Times.) But BioMed also revealed in its first-quarter financial results that it has traded a South San Francisco building for a Redwood City structure that was owned by biotech powerhouse Genentech Inc.

Diagnostics and monitoring company Theranos takes 220,000 square feet in Newark

Theranos Inc. is moving its headquarters to Newark from Palo Alto.
The company recently signed a 220,000-square-foot lease in Pacific Research Center, a 10-building, 1.4 million-square-foot complex owned by San Diego-based BioMed Realty Trust.
The company plans to move its headquarters and manufacturing operations to Pacific Research Center, said Terrence Grindall, Newark’s head of community development.

Depomed moving from Menlo Park to Newark

The specialty pharmaceutical company Depomed Inc. is moving from Menlo Park to the Pacific Research Center in Newark.
Depomed (NASDAQ: DEPO) signed a 10-year lease with BioMed Realty Trust Inc. for approximately 60,000 square feet of space.

Tech boom spurs more bio building

The Salesforce effect is sweeping down the Peninsula.
HCP Inc. plans to build as much as 800,000 square feet of lab and office space on a 20-acre former U.S. Steel site in South San Francisco after buying the land from Genentech Inc. last month for $65 million.

Real Deals: Onyx, stem cells, neuroscience, the Science Center at Oyster Point and more

The San Francisco Business Times' annual Real Estate Deals of the Year hit the streets Friday. Here are the life sciences-related real estate stories stories:

Best new R&D
UCSF stem cell research building
Near the base of Mount Sutro and behind the jam-packed medical towers of UCSF’s Parnassus Avenue campus, there was no hiding the complexity of designing and constructing a $123 million stem cell research building on a hillside.

There was the $20 million that needed to be shaved from the original conceptual design by architect Rafael Vinoly — without cutting net square footage. There was the complication of building the 68,500-square-foot structure just a few miles from the San Andreas Fault.
Arching over the entire project, too, was the timetable set by the California Institute for Regenerative Medicine, which jumpstarted the project with $34.9 million of state bond money: 24 months to go from schematic design to work-ready occupancy.

Best new R&D (finalist)
Stanford stem cell research building
Stanford University is coming together over stem cells.
The university’s $225 million, 200,000-square-foot stem cell research center — the nation’s largest such facility — will house 550 researchers, ranging from those studying developmental biology and immunology to those concentrating on cancer and neuroscience.

Best R&D Sale/Lease
Chamberlin portfolio
BioMed Realty Trust bought Chamberlin Associates' high-profile Science Center at Oyster Point and Gateway Business Park in October — a potential 1.2 million square feet in the heart of the biotech industry, South San Francisco — for $290.3 million cash and an interest rate swap liability of $7.7 million.

Best R&D Sale/Lease (finalist)
Bayer U.S. Innovation Center
Salesforce.com is moving in, but the heart of San Francisco’s Mission Bay remains life sciences research and development.
In a building originally intended for Pfizer Inc., the world’s largest drug maker, landlord Alexandria Real Estate Equities Inc. has essentially filled it with up-and-coming Nektar Therapeutics Inc. and longtime international player Bayer.
The Bayer deal was sealed in May 2010 for 48,913 square feet in the east wing of the 210,000-square-foot structure.

Best Steal (finalist)
Onyx
Onyx Pharmaceuticals Inc. landed the grand slam of headquarters: a competitive price, room to grow and a spot among the more than two dozen other biotechs in South San Francisco. The 170-person cancer drug company moves in April.

Best Financial (finalist)
UCSF neuroscience building
The University of California San Francisco turned to the traditional lease-back deal to build its Neuroscience Building at Mission Bay, but it re-invented it for its own needs.

UCSF owned the land for the $200 million project, but lacked funding to build it. So it leased the land to a nonprofit group that will sublease it to Edgemoor Real Estate Services and McCarthy Cook & Co. That development team will construct the 237,000-square-foot research and lab facility and lease it back to UCSF.