BioMed Realty's Scott Altick On San Francisco's Hot Life Science Market
With over 3.5M SF of life science space under development in the San Francisco Bay Area it’s no surprise the region is one of the top spots for life science real estate, according to recent JLL data. Companies are snatching up space as quick as it’s being built.
Bisnow spoke with BioMed Realty VP and San Francisco market lead Scott Altick (above) to find out about BioMed Realty’s latest successes and why he’s seeing significant activity in the San Francisco Bay Area and other top markets.
Scott says the advancement of healthcare throughout the country and around the world have been mid- and long-term development drivers. A focus on healthcare innovation from a social and commercial standpoint to keep the aging population thriving has created additional opportunities, especially for real estate companies that best understand how to appeal to the demands of the segment.
“There are a lot of unique characteristics regarding life science, such as location and a proximity to higher education,” Scott says. “The infrastructure and complex building systems are also a lot different than traditional office and R&D projects.”
Unlike other R&D developments, life science buildings typically require more robust infrastructure, such as 24/7 HVAC, backups and redundant systems, clear heights and enhanced floor loads. Scott says his company targets buildings that have the bones of a potential life science building and are in the right locations.
“We don’t target just any building and convert it to life science,” Scott says.
BioMed Realty is a major player in core markets throughout the US and United Kingdom, including San Diego, the San Francisco Bay Area, Seattle, Boston and Cambridge, which are also the hottest hubs right now.
He says San Francisco has been hot over the past 24 to 36 months. In particular, South San Francisco has an established life science area. The Bay Area is often considered the “birthplace of biotech.”
He says there has been a “velocity of deals is very high and vacancy rates are in the low single digits in the Bay Area.”
In the last year or so, BioMed Realty has strengthened relationships with Bristol-Myers Squibb, which expanded its space in Redwood City with its lease of 60k SF at Woodside Technology Park, above. It’s had a growing relationship with Stanford Healthcare, which leases 180k SF from BioMed Realty’s 1.4M SF Pacific Research Center Campus in the East Bay. BioMed Realty also leased 135k SF to Natera and 40k SF to Novartis in San Carlos.
“We’re really seeing a lot of activity on both sides of the bridge,” Scott says. “Big companies are expanding and finding spots in the Bay Area.”
Scott says the life science market looks positive, and he’s seen a lot of players in the Bay Area looking toward modernized campuses with amenities. There has been a bigger demand for amenities inside the campus environment and there is a focus on outdoor amenities, cafés, gyms and conference centers, all of which continue a tech culture seen at companies like Apple and Google.
“These amenities allow you to stay on campus without getting into your car and excess traffic. It’s a way to keep a community and collegiate feel,” Scott says.
South San Francisco will remain a top market since it has a lot of infrastructure and immediate access to Caltrain, BART and the ferry system, nearby freeways and it's one freeway exit away from the San Francisco International Airport, which is advantageous to international companies, according to Scott.
BioMed Realty is working on the 1.3M SF Gateway of the Pacific, above, in South San Francisco. Phase 1 will include 500k SF of lab and office space and a 50k amenity center. Among the amenities to be offered are food and dining options, a fitness center, a park and a multi-room conference center. The campus will be built up over the next five years. It will be across from The Cove, currently under construction.
BioMed Realty is also finding success in several other markets. In San Diego, Illumina leased over 300k SF this year. Added onto the 360k SF in Foster City, the company has leased 825k SF from BioMed Realty in three different markets within the last two years, Scott says.
In Cambridge, MA, BioMed Realty’s largest transactions have been 50 Hampshire and the Sidney Research Campus, above. At 50 Hampshire, Seqirus Inc, Surfance Oncology and Oncorus Inc leased 29,500 SF, 32k SF and 17,500 SF, respectively, totaling about 79k SF. BioMed Realty leased approximately 106k SF at Sidney Research Campus with Gritstone Oncology leasing 14k SF, Neon Therapeutics at 26,800 SF and Intellia Therapeutics with 65,300 SF.