Wareham Development In the News

Friday, May 30, 2008
Biotech
Biotechs crunched for shell space can't afford to wait
San Francisco Business Times - by Ron Leuty

If more than 2 million square feet of biotech shell space isn't enough, don't worry. There's plenty more on the way.

According to figures assembled by real estate brokerage GVA Kidder Mathews, 2.3 million square feet of shell is on the Bay Area market, including more than 350,000 square feet never occupied by Amgen Inc. in South San Francisco, and another 2.5 million square feet of wet lab/device space.

Then there's another 2.8 million of shell space in the planning stage.

"Shell" is defined as any potential biotech labs or offices currently without wet lab or device space and where the landlord has the ability to fund a minimum of $100 per square foot for wet lab/device buildout.

That seems like more than enough for growing biotechs. "Companies think there's a ton of space available," said GVA Kidder Mathews Vice President Rico Cheung.

But that isn't necessarily so. In San Francisco, for example, there is no ready-to-go wet lab/device space -- no clean rooms, vivariums or manufacturing space. That equates to a crunch for specialized biotech real estate.

Many biotechs, said GVA Kidder Mathews Managing Partner Gregg Domanico, "need to be in labs tomorrow."

The space crunch is especially acute for biotechs looking for 25,000 square feet or more, said James Bennett, a senior vice president with the brokerage. "It's thin pickings for 25,000-plus," he said.

And the pricing?

New, Class A lab space is leasing for $42 to $48 per square foot, triple net, according to the brokers. "No longer is South San Francisco cheaper than San Francisco," said GVA Kidder Mathews principal Skip Whitney.

GVA Kidder Mathews is in a good position to put together solid figures. It represents more than 6 million square feet for landlords, including the Bay Area properties of Alexandria Real Estate Equities as well as BioMed Realty Trust Inc.'s 1.4 million-square-foot Pacific Research Center in Newark.
Wareham inks deals at East Bay properties

The biotech space crunch has paid off for landlords like Wareham Development.

In the past few months alone, Wareham has landed Amyris Biotechnologies Inc. for about 21,000 square feet, on top of an existing 70,000-square-foot lease at EmeryStation East in Emeryville; a 67,000-square-foot extension at several buildings in the Berkeley Aquatic Park campus of Xoma LLC; an expansion to 32,000 square feet over 10 years for Bionovo Inc. in EmeryStation I; and an expansion to 28,000 square feet for the California Department of Justice's DNA Forensic Laboratory at Point Richmond Tech Center II.

Geoff Sears of Wareham said the company's properties generally rent in the neighborhood of $42 per square foot triple net.

"The big picture is these are people who are continuing to have success at what they're doing -- or enough to grow," Sears said. "The market is pretty healthy."
Biotechs already working on tumors like Kennedy's

It won't mean much for Sen. Ted Kennedy or the roughly 20,000 other brain tumor patients in the United States today, but treatments for glioma and other brain tumors eventually may come from the Bay Area.

Kennedy was diagnosed in May with a malignant glioma.

Genentech Inc. will present Phase II data June 2 at the American Society of Clinical Oncology meeting in Chicago, focusing on blockbuster drug Avastin as a treatment for relapsed glioblastoma multiforme, a type of glioma. Meanwhile, Onyx Pharmaceuticals Inc. of Emeryville is testing Nexavar -- already approved against two of the toughest cancers, kidney and liver -- as a single agent or in combination with other therapies for brain cancer.

Genentech plans to file a supplemental drug application with the Food and Drug Administration yet this year, and it will start a Phase III trial for Avastin's use against glioblastoma multiforme, said Genentech spokeswoman Charlotte Arnold.

Avastin already is Genentech's best-selling drug, approved for colorectal, lung and breast cancers.

Arnold would not say how often Avastin is used against glioblastomas -- the FDA prohibits companies from promoting drugs for so-called off-label use -- but the National Comprehensive Cancer Network recently added Avastin to its guidelines for treating recurrent glioblastoma.

rleuty@bizjournals.com / (415) 288-4939

http://cll.bizjournals.com/sanfrancisco/stories/2008/06/02/newscolumn4.html

About Wareham Development

Wareham Development is committed to the long-term economic and environmental vitality of the communities where we do business. During the planning process, we work closely with city and state agencies to ensure that each project provides maximum benefit to its surrounding community. And, unlike many developers who build projects only to sell them, we retain ownership of the majority of our developments, many of which have come to define the thriving technology corridor between the Bay and Richmond-San Rafael bridges.

The Wareham vision encompasses the spark and promise of small companies on the verge of growth, and large corporations whose fortunes span the globe. We are proud of our associations with all of our tenants, and feel deeply privileged to play a role in their success.