BioDirt's 2Q Recap 🧬

Welcome to BioDirt’s quarterly newsletter. We have some biotech real estate highlights to share, along with some other news in the biotech/commercial real estate orbit.

Also…

A special thank you to Sophia Kim, a UC Berkeley rising junior and CREA summer intern, for accompanying me to the First Look SoCal Innovation Showcase (more on that below) and helping put together this newsletter.

REAL ESTATE HIGHLIGHTS

Alexandria plans to sell 1280 Rancho Conejo Blvd in Thousand Oaks. Atara Bio currently leases the whole 33,000-square-foot building and is on the books through 2032. The success of the transaction will speak volumes to the current market for biotech real estate. However, it’s hard to forecast the outcome of this sale due to the volatility of the variables: interest rates, public biotech valuations, commercial real estate woes, rising cap rates, and asset pricing. For pricing, the word is they are shooting for a 7.5% cap rate, which shakes out to about $600/SF. (source: Me!)

Pharmavite renewed its 147,000-square-foot manufacturing and distribution building lease at 1150 Aviation Pl, San Fernando. (source: Me!)

AcuraStem subleased approximately 5,000 square feet of second-generation wet lab space from Doheny Eye Institute at 150 N Orange Grove Blvd, Pasadena. AcuraStem is a patient-based therapeutics company advancing treatments for ALS, FTD, and additional neurodegenerative indications. (source: Me!)

Proone Labs and GrittGene Therapeutics leased space at 801 N Brand Blvd, Glendale. (source: Me!)

El Segundo’s ImmunityBio’s new cancer-fighting drug, ANKTIVA, will be filled at a California plant and at a 400,000-square-foot plant in Dunkirk, NY. The state-of-the-art building in which the fill-finish equipment has been purchased and is in the process of being installed was acquired by ImmunityBio in its acquisition of the leasehold interest in the pharmaceutical manufacturing space from global pharmaceutical company Athenex, Inc. in February 2022. The production location includes clean rooms for upstream and downstream manufacturing activities, as well as fill and finish and large-scale lyophilization capabilities. (source: The Post-Journal)

As a part of Takeda’s larger plan to boost production of its plasma-derived therapies, the company is allocating $230 million to expand its manufacturing site in Los Angeles. (source: Endpoint News)

FIELD TRIP TO THE SKIRBALL CULTURAL CENTER

In other news, I had a good time at the First Look SoCal Innovation Showcase at the Skirball Cultural Center in Los Angeles. The keynote speakers, Keith Strier (VP of Worldwide AI Initiatives at NVIDIA) and Mike Miller (Director of Product at Amazon Web Services), were particularly timely given the current AI-Amaz-ification (new word?!) of everything.

In addition to the many talented life science startups who presented for a panel of experts in the field, I was encouraged by NVIDIA’s Inception program, which assists startups with cutting-edge technology and potential connections with venture capitalists. 
 
One of the standout startups that caught our attention was NeoCare Innovations. In her compelling pitch, NeoCare’s CEO and Founder, Caryn Bradley, unveiled how they are revolutionizing the NICU environment, ultimately enhancing the lives of sick and preterm infants. Equally impressive was the presentation from life science startup NanoMood’s co-CEO and Co-Founder, Norah Al-Azzam. NanoMood’s use of biometric data is reshaping treatment management for neurological diseases through digital health innovation. 
 
I left the showcase feeling inspired and hopeful for the vibrant future of the biotech sector. The enthusiasm and innovation displayed by these talented life science startups point to a promising trajectory for the VC market and biotech industry. 

At CREA, we are fully committed to supporting the growth of the biotech sector. We are excited to watch greater Los Angeles startups make the leap from an academic setting to their own labs and will always be ready to help. Whether it's finding an incubator space or larger stand-alone facilities, we will work with you to align your real estate with your business needs. Our goal is to help scientists find a space where innovation can flourish.

Speaking of facilities, LA currently has some move-in-ready lab spaces available now (see below).

MOVE-IN READY LAB SPACE

4503 Glencoe Ave, Marina Del Rey

This 35,000-square-foot second-generation wet lab/GMP and office space sublease has been on the market for a bit, but that’s not because of a lack of accommodations.

120 Via Merida, Westlake Village

In March, Gray Matter, the life sciences initiative of Graymark Capital, purchased the Westlake Labs project and set up a phased conversion plan to transform the 98,776 square foot building to a 60% labs, 40% office mix. Currently, there is 35,000 square feet of state-of-the-art, move-in-ready, spec-wet lab. This commitment to building a lab “on spec” is risky and daring, but by the time it is done, demand will be back. (Source: Commercial Observer)  

18408-18412 W Oxnard St, Tarzana

Instil Bio made big news when it announced plans to bail from Los Angeles, which will include the sale of its recently completed cGMP lab and manufacturing facility in Tarzana. The Property provides a tenant with the rare opportunity to lease a newly built, state-of-the-art cGMP facility in Los Angeles’ emerging Life Sciences market.

1525 Rancho Conejo Blvd, Thousand Oaks

Instil Bio is leaving behind a fully built-out lab and office. The owner is Alan Glass, LA's version of Alexandria. Spread out over two buildings and 14.15 acres, the HATCHcampus in Thousand Oaks boasts a total of 160,980 SF, with 100,000 SF of that space designed and built for R&D.

SCUTTLEBUTT

Eli Lilly’s Protomer Technologies is searching Pasadena for 50,000 square feet of lab space.

Hep B United Philadelphia (HBUP) is also looking for space in the Pasadena market.

NOTABLE FUNDINGS + HIGHLIGHTS

This year is shaping up as the first we’ve seen in which biotech and healthcare startups receive a majority of U.S. Series A commitments.

So far in 2024, biotech and health companies have pulled in around $5.6 billion across 110 Series A rounds, per Crunchbase data. That accounts for 53% of all funding at the Series A stage, which is a closely watched barometer for the startup ecosystem. (source: Crunchbase)

Torl BioTherapeutics, $158M, biotech: It was just about a year ago that Los Angeles-based biopharmaceutical company Torl BioTherapeutics closed a $158 million Series B led by Goldman Sachs Asset Management. Well, the cancer-treating biotech is back this week after it closed a B-2 financing at another $158 million led by Deep Track Capital. The startup will use the new cash in the development of novel, antibody-based therapeutics to fight cancer. Founded in 2018, Torl has raised more than $350 million, per the company. (source: Crunchbase)

Two Life Sciences professors, Arjun Deb, M.D. and Lili Yang, Ph.D – members of the Eli and Edythe Broad Center of Regenerative Medicine and Stem Cell Research at UCLA – have received a combined $12.3 million in grants from the California Institute for Regenerative Medicine, the state’s stem cell agency, to advance new stem cell-based treatments for heart disease and ovarian cancer. (source: UCLA College of Life Sciences)

UPDATE ON UCLA’S WESTSIDE PAVILLION OVERHAUL

Exciting developments are underway for LA's biotech community! As highlighted in my January newsletter, UCLA is establishing a significant biotech hub at the former Westside Pavilion Mall. This 700,000-square-foot facility will not just be a research facility but a globally recognized center that will house a newly created immunology and quantum science center, marking a significant step in the advancement of LA's biotech sector.  

After reading Howard Fine's LABJ article, "Biopower Player," I was reminded of the vibrant history of the biotech industry in Los Angeles. Beginning in the early 2000s, Santa Monica and West Los Angeles became the home to three successful biotech startups: Agensys, Cougar Biotechnology, and Kite Pharma. These companies were then sold between 2007 and 2017 for a collective $13.4 billion.  

This wealth, concentrated among a few individuals who happen to be scientists, led to new biotech companies and “family offices” making significant investments in life sciences, real estate, and other businesses. In tech, this is called the “virtuous cycle,” where within a tight geographic area, new capital creates more capital, attracting other capital along with an “ecosystem” of supporting people and places like lawyers, bankers, and real estate specifically serving the industry.

Urologist and immunology researcher Arie Belldegrun has been pivotal in transforming LA's biotech sector. His vision and efforts led to the creation of the California Institute for Immunology and Immunotherapy at UCLA's new hub, a testament to his commitment and contribution to the field. The article reveals that Belldegrun was motivated to expand the biotech sector in LA after the late billionaire philanthropist Eli Broad chose to place a bioscience research center in Cambridge, Massachusetts, and not LA due to space constraints.   

In 2018, with the help of Dr. Eric Esrailian, Dr. Gary Michelson, Meyer Luskin, Sean Parker, and Michael Milken, Belldegrun and his team committed several hundred million dollars and aimed to raise another $1 billion to construct this Immunology and Immunotherapy Institute. Initially, they were planning to build this facility at a site near Westwood Boulevard and Le Conte Avenue; however, plans quickly changed after Google decided not to pursue their initial plans to occupy the Westside Pavilion shopping mall.   

Stay tuned for more updates as this project progresses.

WHAT I’M CONSUMING AND ENJOYING

📰 If you didn’t catch the NY Times piece, How AI is Revolutionizing Drug Development, featuring CREA client Terray Therapeutics, check it out.

📈 Biopharma Dive’s updated biotech IPO tracker is an easy way to check out and compare the IPO market.

Thanks for reading. 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 #0109718

P.S. Whenever you’re ready, here are 3 ways I can help you with your real estate.

1. A new home for your business. So, you want to move, but you don’t know the market. I can help.

2. Time to renew your lease? Don’t quite trust your landlord? Consider me your personal polygraph. BTW, I recommend starting the lease renewal process six months out at a minimum.

3. Sublease your space. You’ve outgrown your space and need to move but don’t want to pay two rents? I got you.