Available Bay Area Life Science Space Keeps Growing
Amgen puts 100K SF up for sublease in a market that has 20% vacancy rate.
Available life science space continues to grow in the Bay Area, as new supply floods the market while key players are reducing or consolidate their footprints.
Biotech firm Amgen is offering for sublease about 100K SF at the former headquarters of ChemoCentryx in San Carlos on the Peninsula.
The space offered for sublease includes the fifth and sixth floors at 835 Industrial Road, one of two buildings that make up the Alexandria Center for Life Science, according to a report in the San Francisco Business Times.
Amgen inherited a 96K SF lease in the 278K SF building when it bought ChemoCentryx, a drug maker, in 2022 for $3.9B. The lease for the lab and office space runs until 2030.
A wave of new supply—including conversions as well as ground-up development—is outpacing demand in the Bay Area’s life science sector, pushing the vacancy rate for Q1 2024 up over 20%.
The leasing market slowdown in the Bay Area continued in the first quarter, with gross leasing activity totaling just 394,000 SF for the entire region, 41% below the 10-year quarterly average.
Net absorption for life science space remained in negative territory, totaling minus 648K SF, according to a market report from CBRE. The overall vacancy rate in the Bay Area reached 20.4% in Q1. The life science vacancy rate in the San Francisco Peninsula submarket hit 22.2%, up 460 bps from the fourth quarter.
Nine new projects encompassing almost 1M SF were delivered in the first quarter in the Bay Area. The largest delivery, Phase 3′s 561,000-square-foot Genesis Marina project, arrived 60% pre-leased; the largest conversion project, the 52K SF 3600 Bridge building from Longfellow, delivered unleased, the report said.
The life science construction pipeline in the Bay Area is bulging, fueled by projects initiated last year to convert empty offices into lab space. At the end of Q1 2024, there were 33 life science projects encompassing nearly 7.4M SF under construction, including 5.2M SF of ground-up development and 2.1M SF of full building conversions to life sciences.
In March, Pfizer put up for sublease 91K SF in the Cove at Oyster Point at the former South San Francisco headquarters of drug developer Global Blood Therapeutics, which Pfizer bought two years ago for $5.4B.