Wareham Development In the News

Friday, October 24, 2008
Wareham turned a lucky break into big business
San Francisco Business Times - by Blanca Torres

No one expected Emeryville to transform from an industrial wasteland to a hub of high-tech companies. In the same vein, Wareham Development never expected to become landlord to several burgeoning biotechnology firms or to carve out a niche in building life sciences and laboratory space.

For both Emeryville and Wareham, it was a case of being at the right place at the right time.

During the 1970s, former industrial sites in cities like Emeryville and South San Francisco began attracting firms that wanted to lease space with low rents and high ceilings that could easily turn into laboratories. At that time, Wareham was just starting to acquire buildings in Emeryville, including a former Shell Oil Co. research facility.

“They didn’t have the name ‘biotech’ early on,” said Geoff Sears, a partner with Wareham. “We got into it by fortunate accident. It wasn’t an existing industry that you could say, ‘I’m going to get into it.’”

Accident or not, Wareham’s focus on life science facilities continues to grow. The company, based in San Rafael, has developed more than 4 million square feet of commercial, residential and life science properties in Emeryville, Berkeley, Richmond and Marin County. Of that, about 1.75 million square feet is dedicated to life science, with 300,000 square feet more on the way.

Some of Wareham’s early life science tenants included Chiron Corp., now owned by Novartis AG, and Bayer Healthcare, the aspirin maker. Other biotech tenants include Amyris Biotechnologies, Daynavax Technologies, Nanomix, Sangamo Biosciences, BioNovo Inc. and the Ernest Gallo Clinic and Research Center.

Many of those companies and others sprouted from the science departments of research institutions including University of California, Berkeley, Stanford University and the University of California, San Francisco.

“We’re very closely tied in to UCSF,” said Bill Sawyers, chief administrative officer of the Ernest Gallo Clinic and Research Center, which extended its 87,000-square-foot lease in Emeryville with Wareham earlier this year. “From a strategic standpoint, it would make more sense to be (in Mission Bay), but Wareham has been a great landlord. They are very knowledgeable about the needs of laboratories and lab tenants.”

Unlike most office leaseholders, biotech tenants often have to house more equipment or require different set-ups for their facilities.

“(Wareham) is very savvy and sophisticated,” Sawyers said. “When you tell them about a specific problem, they understand it.”

Developing lab space is more costly and complicated than building office space, Sears said. The buildings call for not only higher ceilings, but also more air ventilation, wider space between floors, more pipelines for gases and more electrical power.

Wareham also tries to incorporate green space and permanent art exhibits into its buildings. Many are topped with Tibetan prayer flags, a personal touch from the company’s founder, Rich Robbins.

“Wareham is a first class operation all the way,” said Bob Canter, president and chief executive of the Emeryville Chamber of Commerce. “They build really good, LEED-certified, beautiful buildings … that have attracted lots of quality tenants.”

Building typical office space costs about $200 to $300 per square foot, while a life science facility can cost $600 to $900 per square foot, Sears said. Those higher costs make the buildings more of a gamble for a landlord, especially when many of the tenants are startups.

“You have to be committed to it and have a long-term view,” Sears said. “Some of our tenants have been tenants for years and never made any money, but still manage to find a way to pay their rent.”

Another issue is how to accommodate companies when they need to scale back or expand. Some firms can multiply overnight when they land more venture capital funding or score a major drug approval.

“We’re very relationship-based,” Sears said. “Instead of dating, we like to be married, but have very flexible marriages. … Our thinking is, we’ll always have enough people in our buildings that more (of them) are growing than contracting.”

btorres@bizjournals.com / (415) 288-4960

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.