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November 29, 2022
BioMed Realty Tops Off First Phase of Debut Project in San Francisco East Bay Hub
Biotech Development Giant Chases Ongoing Demand for Lab and Research Space in Emeryville
By Katie Burke: CoStar News
Life science development giant BioMed Realty topped off one of the largest projects moving through the San Francisco Bay Area's construction pipeline, underscoring the research and lab sector's strength despite mounting economic uncertainty.
The San Diego biotech-focused real estate investment trust, which is owned by investment giant Blackstone Group, recently passed the construction milestone for the first phase of what is slated to become a lab and office campus in the East Bay city of Emeryville. Marketed as Emery Yards, the project at 5300 Chiron Way will span more than 1 million square feet upon completion of its planned three phases.
The first phase, which will include a 285,000-square-foot lab and office building as well as an ancillary amenity building, is expected to be completed by 2024. “Emeryville is going to be great,” Salil Payapilly, senior vice president of development for BioMed in San Francisco, said of the city's long history as a life science and technology hub. “This is one of the fastest-growing submarkets within the Bay Area, which itself is a huge, thriving market for life science research. So, all in all, I think this is going to be a great addition to our portfolio and to the research community locally.”
BioMed has a string of high-profile properties and developments across the Bay Area, yet Emery Yards is the firm's first in Emeryville, one of the Bay Area's most concentrated life sciences hubs.
Even in the face of rising interest rates and economic turbulence, the San Francisco Bay Area has maintained its role as a leading national biotech market as tenant demand for lab and research space continues to surpass what's available. Tenants were in the market for about 5.5 million square feet of life science space in the third quarter, according to Newmark data, an increase from the 4.4 million square feet reported throughout the second quarter.
Developers have been eager to capitalize on the widening supply and demand gap, kicking off a record number of life science projects in the third quarter that total more than 7 million square feet, according to Newmark. About 20% of that pipeline is preleased or in the middle of lease negotiations, and it also doesn't include the roughly 44.2 million square feet of potential ground-up construction and conversion projects projected to materialize in the next five to 10 years.
BioMed Realty's development pipeline alone spans about 3.7 million square feet in markets such as Seattle, Boston, San Diego and San Francisco. The Blackstone portfolio company also has upwards of 7 million square feet of proposed projects waiting in the wings.
November 29, 2022
Life science developer BioMed Realty topped off the first phase of its Emery Yards project in Emeryville, California. (BioMed Realty)