Ground Broken on $70.4M Pharmaceutical Facility in Southern California’s Life Sciences Market

BioMed is developing the project at a cost of $400 per-square-foot, or a total of $70.4 million.

June 3, 2010
By Barbra Murray, Contributing Editor

BioMed Realty Trust Inc. has just broken ground on a build-to-suit research facility in Carlsbad, Calif., for Isis Pharmaceuticals, which will occupy the state-of-the-art building under a 20-year lease agreement with the San Diego-based REIT.

Additional terms of Isis’s lease agreement with BioMed have not been disclosed. However, according to a report by real estate services firm Cushman & Wakefield Inc. that cites reliable sources, BioMed is developing the project at a cost of $400 per-square-foot, or a total of $70.4 million. And reportedly, Isis’s rental rate will be approximately 3.00 per-square-foot, triple net. The facility will occupy just over 12 acres within the 414-acre Carlsbad Oaks North Business Park in San Diego County, and will serve as Isis’s primary research and development site, allowing the company to consolidate most of its operations under a single roof. Architectural firm DGA designed the facility, and DPR Construction Inc. is the project’s general contractor.

Behind the Boston/Cambridge and the San Francisco Bay Area markets, San Diego County is the third largest biotech hub in the U.S., according to Cushman and Wakefield, featuring approximately 14 million square feet of laboratory space. Among the other commercial real estate sectors in San Diego County, the life sciences sector is holding its own during these precarious economic times. “In this choppy environment, we’re faring a little bit better than the other sectors, but we’re not immune to the capital markets,” Brent Jacobs, Senior Director with Cushman & Wakefield’s Global Life Science Practice Group, told CPE. “Our vacancy rate is 10 percent, but we’re chipping away at that; we’re making progress. We’re in better shape than the office and retail markets.”

The progress in bringing down vacancy rates can be partially attributed to a growing segment within San Diego County’s life science industry. “There has been a whole flurry of young companies starting out,” Jacobs said. “There’s been a very good flow of new companies, the biggest I’ve seen in about 10 years.” Most of the available chunks of space are between 20,000 and 50,000 square feet, although there are currently a few tenants that, like Isis, desire accommodations exceeding 100,000 square feet of contiguous space. Jacobs notes that Isis’s consolidation plan is a good one. “Not having walls helps a great deal with science.”