Leases have been signed for 42% of the building and LOIs have been submitted for another 38% of the building. Nork says he is confident that the LOIs will turn into signed leases and that the building will be fully leased by the end of the year thanks to the building's "proximity to the University [of California at Berkeley] and the fact that it is designed for lab users from the ground up."
The glass-clad EmeryStation East building has 64,000-sf floor plates and a 20,000-sf garden with fountains and sculptures. Amenities include anti-vibration technology for the sensitive calibration needs in medical research, co-generation power systems for certainty of power supplies and the latest in security systems. Nork is marketing the property with C&C senior sales associate Jonathan Tomasco and C&C EVP Randy Scott.
Most of the building was delivered in "warm shell" condition in June while some smaller spaces on the first floor are being fully built out on a speculative basis, Nork says. The triple-net asking lease rate, $3.50 per sf, assumes a $100-per-sf tenant improvement allowance.
The largest of the two tenants already signed on is Amyris Biotechnologies, which is expanding from 15,000 sf in EmeryStation North to 70,000 sf in EmeryStation East. The lease is characterized as "long term," which means it is likely for at least 10 years in length.
Amyris is currently focused on two things: The production of the drug artemisinin to fight malaria in developing countries, and the production of renewable biofuels. Nork says the company has not yet decided whether it will keep its current space in EmeryStation North.
The other lease was signed by Novartis, which took 35,000 sf in the building, also on a "long-term" basis. Novartis, a publicly traded company involved in pharmaceuticals, vaccines and diagnostics. The lease was signed by Novartis' Vaccines and Diagnostics subsidiary, which is in the process of selling its manufacturing business and assets relating to the pharmaceutical product, Betaseron, to Bayer Shering Pharma AG.
Wareham paid about $10 million for the development site and constructed the facility on a speculative basis at a cost of approximately $400 per sf. Wareham principal Chris Barlow told GlobeSt.com last year as construction began that the reason for the $100-million development risk is simple: "We have about 1.2 million sf of life science space in the Bay Area and we have zero vacancy. The last two or three years, we have been able to accommodate growth by existing clients and service new ones. Now, without the new building, the problem we would have faced next was not being able to meet the next big requirement."
Wareham's existing clients include government agencies, such as the state department of Justice and Substance Control and the federal Environmental Protection Agency, and multinationals such as Novartis and Bayer. "This is a relationship business and you really need to have space on hand in order to let existing tenants grow and respond quickly to new ones," Barlow says.
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