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EXCLUSIVE: Biotech Nabs Chunk Of REIT's Bay Area Campus For New HQ

The second big regional sublease for lab space in as many weeks has been signed just across the Bay in South San Francisco.

Five Prime Therapeutics will sublease about 115K SF of lab and office space in South San Francisco to fellow biotech company Sutro Biopharma, both companies disclosed last week in filings with the Securities and Exchange Commission. At 111 Oyster Point Blvd., the property is part of healthcare REIT Healthpeak Properties' 884K SF The Cove at Oyster Point life sciences business park.

Neither Sutro, Five Prime nor Healthpeak responded to requests for comment.

111 Oyster Point Blvd., where Sutro Biopharma has agreed to sublease 115K SF from Five Prime Therapeutics.

The deal, which was signed on Sept. 3, follows another big sublease signed in the ever-active Bay Area life sciences market. The previous week, FoodTech company Perfect Day disclosed it had agreed to sublease 112K SF of Wareham Development's Aquatic Park Center in Berkeley from Aduro Biotech.

Sutro Biopharma's sublease will begin either in April, seven months after Five Prime delivers the space, or nine months after Healthpeak provides written consent, depending on which occurs last.

The filings say Sutro is first taking 85.7K SF before taking the remaining 29.7K SF sometime after. Annual base rent will start at $59.40 per SF and rise 3.4% each year until expiration at the end of 2027. 

Sutro Biopharma has been headquartered at nearby 310 Utah Ave., another Healthpeak-owned property, but said in its SEC filing that it expects to use its new location as "new corporate headquarters and for research and development purposes."

Healthpeak, formerly known as HCP, built The Cove at Oyster Point in phases much of the last decade and had it leased up in its entirety by 2019

The deal follows Five Prime's announcement last year that it would eliminate 70 jobs and sublet a significant portion of its footprint in a downsizing decision meant to "extend the company's cash runway."

Irvine, California-based Healthpeak specializes in healthcare assets like life sciences properties and also senior housing and medical offices.