Google Unit Moves into Former Onyx Biotech Campus
- Mar 11, 2016
By Gail Kalinoski
Verily, formerly known as Google Life Sciences, will begin moving out of Silicon Valley and into one of Alexandria Real Estate Equities Inc.’s campuses in South San Francisco, Calif., relocating about 400 employees and eventually as many as 1,000.
The life sciences company is subleasing 407,000 square feet at 249/259/269 East Grand Ave. from Amgen Inc., which had offices and labs for Onyx Pharmaceuticals Inc. there. Amgen, which acquired Onyx in 2013, is in the process of subleasing excess space in the region, according to the San Francisco Business Times, which first reported the Verily deal for the South San Francisco space.
Joel Marcus, Alexandria’s chairman, CEO & founder, told Commercial Property Executive Verily is moving into three former Onyx buildings that Alexandria built for them “just a few years ago.” He noted there is room to expand by another 400,000 square feet, essentially doubling the space on the campus.
Stephen Richardson, Alexandria’s COO and San Francisco’s regional market director, said the REIT was “honored that Verily has chosen to expand into one of Alexandria’s world-class collaborative science and technology campuses.”
“Through our long-term relationship with Google, which dates back to 1998, we have been able to provide Verily with a highly curated, innovative and integrative campus solution, which will help support its mission to use technology to better understand health, as well as prevent, detect and manage disease,” Richardson said in a prepared statement about the sublease.
Verily is currently based in Mountain View, Calif., on the campus of Alphabet, Google’s parent company. Alexandria, which was founded in 1994, was Google’s landlord at its first campus in Mountain View.
“We continue to have that relationship almost 20 years later,” Marcus told CPE.
The three East Grand Avenue buildings are part of Alexandria’s holdings in South San Francisco, a city in San Mateo County on the San Francisco Peninsula that is known for its large number of life sciences companies. Alexandria, based in Pasadena, Calif., is the dominant life science owner and operator in the San Francisco region with approximately 3.7 million square feet, including development projects in the Mission Bay/SoMa in San Francisco, South San Francisco and Palo Alto/Stanford Research Park submarkets. Marcus said Alexandria currently has more than 1.5 million square feet of space in South San Francisco.
“We have a pretty big and deep stake in South San Francisco,” he said.
One the largest office REITs focusing on the science and technology sectors, Alexandria also has dominant market presence in Boston, New York City, San Diego, Seattle, Maryland and the Research Triangle Park. Alexandria has an asset base of 32 million square feet, including 20.1 million rentable square feet of operating properties and development and redevelopment projects. The REIT also has another 11.9 million square feet of future ground-up development projects.
Marcus said increasingly the tech and life sciences sectors are coming together in submarkets like Mission Bay/SoMa and Cambridge, Mass., where Alexandria Center at Kendall Square is located. The 11-acre, 1.6 million-square-foot science and technology campus is part of the Cambridge Kendall Square innovation cluster. In June, Alexandria announced Bristol-Myers Squibb would be the anchor tenant at 100 Binney St., a 431,500-square-foot research and development center it was building. Also last summer, Alexandria sold a 70 percent stake in 225 Binney St. to TIAA-CREF for $190.1 million. More recently, the REIT sold stakes in two San Francisco properties to TIAA-CREF—409/499 Illinois St. and 1500 Owens St. for $189.6 million and $73.3 million, respectively.
Alexandria’s San Francisco asset base is fully leased with investment-grade tenants like Roche, Bayer, Celgene and Pfizer and top institutions including Stanford University and University of California, San Francisco. The REIT also has a development pipeline in Mission Bay/SoMa, where it is building properties for three large tech companies—Uber, 500,000 square feet; Stripe, 300,000 square feet; and Pinterest, which is getting a 150,000-square-foot building at 505 Brannan St. in SoMa.
“In this market where current prices are at market peak, developing is a much more profitable business for us,” Marcus told CPE.