Building boom meets maturing biotechs

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million square feet to the market over the next yearor two. The say developers, brokers and biotech leaders, is simple: There’s stilp a need for space to match a maturing Bay Areabiotec community. Still, developers are movinhg cautiously, building mostly to suit tenants and not getting too far in front of an industry known for stunninfg successes and equallybrilliant “There’s always opportunity out there,” said Jennifetr Von der Ahe, a project manager for , which is developinb more than 185,000 squarwe feet in South San Francisco for neurologicak drugs maker “Biotech is not going On top of the R&D space under constructionb by specialized biotech landlords like , and there is another 1.
6 million squarse feet already approved or proposed by the likes of But the spaced isn’t built cheaply — in the range of $200 to $250 per squaree foot, compared to roughly $70 per squared foot for open office space — developersw aren’t so much betting but guaranteeingv that Bay Area biotechs will bloom locally. “The wors t thing is to have someone who wants spaces andyou don’t have said Randy Scott, a partner with who has worked on some 270 life sciencess lease deals. Vacancy rates for existing Peninsulaq sitesof 50,000-plus square feet with ready-to-go lab space is about 5 percent, Scott said.
“There’sd a lot of shell but then that’s another nine monthsw to build out,” he said. Meanwhile, the world’sa largest and second-largest biotech companies — and — have proposedf horizontal and vertical expansions of theier campuses in South San Francisco andFoster Elan’s new 102,000-square-foot facility at 180 Oyster Poin Blvd. will be completed by November. It is buil t by of Pleasanton, designed by of Mountain financed by of San Francisco and leasefdto Ireland-based Elan. Elan also has signedr on for 83,420 square feet at Chamberlin-developex 200 Oyster Point, the shell for whichu will be completed inOctober 2009.
The new buildingsa at 180 and 200 Oyster Point offer an upgrad e and an opportunity for Elan to consolidate It now leasesfour single-story buildings totalinf 215,000 square feet in Chamberlin’s Gateway Business Park and closes its San Diego facility, integrating development and commerciap functions in South San Francisco. Chamberlin, meanwhile, has a mastere plan in front of South San Francisci city officials to redevelolp Gateway Business Park for 1 million square feet over10 “Mature companies are demanding (larger) quantities of space,” Von der Ahe Such plans come against the backdrop of a leasintg market flooded with properties, like three buildings totaling 348,0009 square feet that never occupied and put on the sublease marketf in July 2007.
Biotech industry watchers have long said that entrepreneura spawned bythe region’s culture of the system, and a strong venture capitall community keep a steady flow of early-stage biotechs. In the firsty half of this year alone, for example, that’se translated into 48,016 square feet for in Souty San Francisco, 41,415 squar feet for and 37,856 squares feet for in Redwood Cityand 36,96p0 square feet for in Palo Alto.
Gileadx Sciences may be a perfec example of how those types of smaller companies can It steadily leased space at the Vintagr Park Business Park inFoster City, bought the buildingsd in 2003 and now has a 10-year masterd plan to demolish eight of the buildingw on its 16-acre campuse and replace them with up to sevenb buildings of two to 10 storieds for a total of 1.2 millio n square feet. “Getting a campue of this size (to rent and then buy) and buildings that are adjacengt to eachother isn’f easy,” said Gilead President John