Life Science Hub to Replace East Bay Office Campus

A Burlingame-based developer is betting that lagging demand eventually will catch up with the burgeoning supply of life science space in the Berkeley market by replacing an office campus.

The life science sector in the East Bay city has grown to about 1.5M SF, doubling in the last five years, but as a record-high tide of venture capital during the pandemic receded last year, demand has been unable to keep pace with new supply.

Berkeley’s R&D market recorded a vacancy rate of 14.1% in the second quarter of 2024, according to CBRE data. The epicenter of the life science slump in the East Bay is just a few miles south in Emeryville, where vacancy hit 37% in Q2.

Despite the downturn, Woodstock Development has unveiled plans to replace an office campus in West Berkeley with a 247,647 SF life science hub at 600 Bancroft Way next to the Aquatic Park, the San Francisco Business Times reported.

The site currently is occupied by a three-building office and R&D campus encompassing about 48K SF. The property is owned by Invesco Real Estate Partners, which bought the 1970s-era campus in 2021 for $40M.

According to a pre-application filed with Berkeley last week, the campus will be demolished and replaced with a new building that will rise three stories on the northern half of the property and four stories on the southern half, with parking for 512 vehicles.

“We are very excited to begin planning this state-of-the-art life sciences hub in this growing cluster in West Berkeley near the iconic Aquatic Park,” said Kirk Syme, Woodstock Development president, in a statement.

“While it’s early in the process, we are committed to being thought partners with city leaders and civic stakeholders to design a project that’s beautiful, sustainable and represents a thoughtful vision for creating good jobs in West Berkeley and looks at how to meaningfully improve the civic space that surrounds it,” Syme said.

Woodstock is working with Santa Monica-based architect HGA and landscape architects Groundworks on the project.

Berkeley has initiated a series of projects to upgrade and repair the infrastructure of the popular 86-year-old Aquatic Park, which features a mile-long artificial lagoon stretching between a major rail corridor and Interstate 80.

Woodstock has completed 3M SF of commercial life science projects on the San Francisco Peninsula and in the East Bay, with more than 2M SF in its pipeline, according to the company. In March, Woodstock and San Francisco-based DivcoWest got approval to build a new 1.46M SF office and lab campus along Burlingame’s shoreline on the Peninsula.

The East Bay life science market as a whole, where well over 1M SF of square feet of new lab space is nearing delivery, posted a vacancy rate of 12.4% in the second quarter.

During the pandemic, East Bay markets including Emeryville, Berkeley and Alameda saw a surge in life science development backed by VC funding, with close to 2M SF of deliveries between 2022 and 2023.

Emeryville, a two-square-mile city, had more than $650M in life science building permit applications between 2021 and 2023. The new development grew the city’s inventory to about 1.5M SF, the same size as Berkeley’s life science sector.

Now, with another 285K SF of life science space under construction in Emeryville, demand has fallen sharply and there are signs of distress. The life science vacancy rate peaked at 37.5% in Q1 2024 and held steady at 37% in the second quarter.

The life science slump is afflicting the Bay Area’s entire 42M SF market, where CBRE reported the vacancy rate was 24.6% at the end of the second quarter. An estimated 9M SF of entitled projects have been put on hold by developers in the Bay Area during the downturn.