November 10, 2016
By Mark Terry, BioSpace.com Breaking News Staff
South San Francisco, Calif. – Genentech , part of the Roche Group, acquired four buildings it had been leasing. Two of the buildings were parking structures and were owned by biotech real estate developer HCP Inc. (HCP).
Genentech spokeswoman Rebecca Phillips indicated that the two office buildings were being used as research, office and administrative spaces. The parking garages have 1,184 spaces. The total square footage of the four spaces is almost 500,000 square feet.
The San Francisco Business Times, writes, “The deal comes as life sciences real estate developers amp up construction on a variety of projects. In South San Francisco alone, more than 4 million square feet of space is entitled or under construction, including HCP’s 884,000-square-foot Cove project at Highway 101 and Oyster Point Boulevard.”
The Bay Area is a biotech hotspot, but one of the major challenges it’s facing is room to grow. About 15 years ago, there were approximately six biotech incubators and accelerators in the area, but now is home to about 70. These companies, as well as the presence of companies like Celgene Corp. (CELG), Bayer HealthCare Pharmaceuticals (BAY), and FibroGen Inc., have made the Mission Bay the place to be, in addition to its proximity to the University of California, San Francisco (UCSF).
But a February San Francisco Business Times article stated, “Now that some of the young companies want to graduate to their own, larger space, they’re finding little to nothing in the San Francisco biotech enclave that helped them grow.”
And apparently even the older companies like Genentech are making moves on the local real estate. The properties it’s acquiring have been in use by Genentech since 2006. The deal closes November 1.
Genentech also plans to buy four more buildings, although Phillips declined to say when. “Fully owning the (buildings) supports our decision-making efforts,” Phillips told the San Francisco Business Times.
The company has about 10,000 employees on its South San Francisco campus. In 2015, it completed Building 35, a research and support center on DNA Way with 255,000 square feet. It also recently moved into a 70,000-square-foot employee center.
Developers are working hard to provide competitive space in the San Francisco Bay Area. HCP is one. BioMed Realty Trust is another. But competition for space is big.
Rick Friday, a senior vice president with real estate brokerage CBRE Inc., told the San Francisco Business Times in February, “Ten years ago, a lot of companies could think two, three years in advance. Now when companies decide they need space, they need it in 12 months or less.”
Earlier this year Scott Altick, vice president and market lead, San Francisco, for Biomed Realty, told BioSpace, “With this amenities focus, and the kind of talent war between top biotech companies to provide their employees with amenities and access, and all these things that their employees want access to, it’s really competition for top talent that’s causing us to raise the bar and the way we design our facilities and projects, to cater to these amenities and to provide all the little things these companies want to help them recruit and retain top talent.”
