BioMed Realty Lands $165M in Financing for Bay Area Asset

With the assistance of Newmark Knight Frank, the company secured a loan for its fully leased life sciences building in Emeryville, Calif.
5300 Chiron Way. Image courtesy of BioMed Realty

BioMed Realty has secured $165 million in financing for 5300 Chiron Way, an approximately 300,000-square-foot life sciences building within the real estate company’s Emery Center of Innovation in Emeryville, Calif., in the San Francisco Bay Area. Acting as exclusive advisor to BioMed, Newmark Knight Frank arranged the financing through an unidentified lender.

READ ALSO: Life Sciences Real Estate Thrives Amid Pandemic

BioMed added 5300 Chiron to its portfolio in March 2019, when it acquired the asset from Novartis for $135 million, with plans of transforming the property and adjacent parcel into a multi-tenant lab and office destination. Originally developed in 1999, the six-story building is currently home to science and material innovation company Zymergen, which signed a 12-year lease in October 2019 to occupy the property in its entirety.

The asset, bolstered by BioMed’s strong reputation and Zymergen’s cutting-edge technology, proved highly attractive to the lending community. “We had an assortment of domestic and foreign banks, along with several debt funds, pursuing the opportunity,” Ramsey Daya, vice chairman with Newmark Knight Frank, told Commercial Property Executive.

With proceeds from the loan in hand, BioMed will invest capital in the planned conversion of 5300 Chiron into a specialized high-tech location to accommodate Zymergen’s new headquarters. The project will mark the first stage in the creation of what Daya described in a prepared statement as one of the most ground-breaking urban infill life science campuses on the West Coast.

All eyes on life sciences

Life sciences real estate has become one of the most sought after and discussed investments during COVID-19, buoyed by strong performance, limited lab availability and the anticipated need for additional lab space in a post-COVID-19 economy, according NKF’s new 2020 Life Sciences: National Overview and Top Market Clusters report. The capital markets’ heightened interest in the sector is clear. “From our perspective, the lending community’s appetite for life sciences has grown considerably with several new entrants into the market over the past 90 days,” Daya told CPE. “With a focus on biotechnology, along with a new charge of biomanufacturing, tenant demand has risen and so has lender interest.”