BioDirt: June Boom?

We’re back! I originally planned this as a quarterly newsletter, but some new opportunities are hitting the market that I want to make you aware of. Plus, some real estate news and a lab cheat sheet because, you know, TL;DR.

Let’s get to it!

RECENT REAL ESTATE NEWS

Xencor opens a $40M lab next to its recently relocated headquarters in Pasadena. It cost roughly $40 million over 13 months to build out 83,000 square feet of space at 465 North Halstead Street, which includes about 31,000 square feet of exclusive lab space and 52,000 square feet of “collaborative” and office space. The company relocated its headquarters and lab space to the building in March from its longtime 48,000-square-foot headquarters and lab facility in Monrovia. (source: Los Angeles Business Journal)

FUJIFILM Diosynth Biotechnologies is taking the former Instil Bio space in Conejo.

AVAILABLE LAB SPACE

Reply to this email if you’d like more info on any of the below opportunities.

605 East Huntington Drive, Monrovia, CA

Formerly occupied by Curative, this is 33,500 SF of ready-to-move into lab and office space (50% lab / 50% office) at rents half the national average. Close to the City of Hope and its renowned cancer hospital, as well as just a short 20-minute drive to Cal Tech. Completed in 2021, this fully built-out BSL-2 Lab was barely used, and I believe it to be one of the most attractive opportunities available. Below are some of its impressive tech specs:

• Flexible Layout that is Compatible with Multiple Lab Uses
• Existing Loading Door for Shipping /Receiving and Storage
• Clear Height 15’
• 4,000 Amps of Power
• Lab Areas are rated ISO 7
• Water Filtration System with 92-gallon Internal Reservoir
• Dedicated HVAC with 100% Outside Air and No Cross Contamination
• Back Up Generator

111 Lemon Ave, Monrovia, CA

Xencor’s former R&D lab space (not a commercial-grade lab) is on the market as a sublease with a term through December 2025. This turnkey second-floor space comes with lab equipment and is comprised of 24,962 SF, split 60% lab / 40% office at a favorable monthly rental rate of $2.90NNN per SF. Key features include a vivarium and glass wash. This opportunity is drawing considerable interest, although an institution of higher education located here in Southern CA had to pass due to a regulatory issue.

Equipment included:

• Existing furniture + fixtures

• Conference room tables

• Glass wash equipment

• Sterilizer

• Oven

• Washer

• Autoclave

3609 S 10th Ave, Los Angeles, CA

Enjoy the economic benefits of an Opportunity Zone in this newly constructed three-story Class A 101,500 SF building that is zoned for laboratory use. Note the space is currently raw. Enclosed in a secure campus environment, the building features tons of outdoor space, abundant natural light, and flexible floor plates. Located a convenient seven-minute drive to the 10 freeway or a nine-minute walk to the Expo/Crenshaw Metro stop.

LIFE SCIENCE BUILDINGS FOR SALE

3155 Fujita Street, Torrance, CA

This free-standing industrial building was remodeled in 2004 and consists of approximately ±6,588 SF, including ±3,000 SF of clean rooms. This high-image building is situated on ±13,698 SF of land.

Sale Price: $3,129,000 ($475 PSF)

5380 Alhambra Ave, Los Angeles, CA

This warm shell space has everything you need to be customized for an early-stage life science company. Suitable for clean rooms, fume hoods, and web labs. And it is BSL-1 and BSL-2 capable, with a high-speed fiber connection. Reach out for the price.

CHEAT SHEET: WET LAB VS DRY LAB FOR YOUR LIFE SCIENCE STARTUP

When you're thinking of creating a life science startup, the most important decision you'll need to make is whether your startup will require the use of a dry lab environment or a wet lab environment. Many life science startups will use both types of laboratories while developing a new product, medicine, or device. The above chart is a good cheat sheet. (Source: University Lab Partners)

AN INVESTOR’S THOUGHT PROCESS

Above, I note that 5380 Alhambra Ave is for sale, but is it a good investment for a biotech company? At this time, I don’t believe so. Here’s why.

While 5380 Alhambra’s East LA location might not strike the casual observer as a biotech hub, in addition to Hatch Space’s fully leased building next door, other biotech notables in the area include Grifols Pharm, USC Med School, Takeda Pharmaceuticals, and LA County Med. The biggie is LA BioSpace at Cal State LA at 1927 Paseo Rancho Castilla, where you can rent a lab, office, bench, etc.

Capital and the cost thereof kinda kills this deal as a user will need to spend who knows what per square foot ($500?) to build a lab here. Again, the cost of capital (interest rates) hurts bioscience company valuations, plus the decreased demand for space and the cost of construction inflation that rate increases are meant to battle only continue to grow. At some point, the effects of monetary policy will kick in, and construction costs will drop, making this a feasible site.

Lastly, several fully built, move-in-ready labs will make this option less competitive.

ON THE MOVE

For the reality TV fans, please notice that Alan Glass and Howard Kozloff, former partners at Hatch Space, seem to have gone their own way. It looks like Alan kept Hatch Space, and Kozloff launched Noblespace with much fanfare and press. Both gentlemen are stand-up guys and legit life science real estate investors.

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That’s a wrap for this issue. If you want me to look into something or have some ideas for the newsletter, reach out, and I’ll get right back to you.

And, as always, we're here to help you with your real estate needs.

Ted Simpson
Founder and CEO
Commercial Real Estate Advisors
(c) +1 310.384.6512
(e) [email protected]
CA DRE License #01097189