• News
  • Construction

New Nexus biotech campus the exception in saturated market

Related Special Reports

Prominently visible from the I-805 freeway, near some of the county's biggest existing biotech companies, San Diego-based Nexus Properties Inc. is building what will eventually be a 161,871-square-foot campus designed for biotech research and development.

The project consists of two buildings, totaling 161,871 square feet. Phase I is a shell building with completion anticipated in January. The two-story, steel frame, concrete tilt-up building, consisting of 58,924 square feet, is ready for tenant improvements.

As soon as the first building is complete, Nexus will focus on developing the Phase II facility, which will consist of 102,947 square feet.

The new development offers space suitable for vivarium, computer lab, nuclear magnetic resonance rooms and ancillary uses. It is within walking distance of the Westfield UTC shopping mall, recently designated for a $900 million redevelopment, more than 10,000 high-end apartment homes, recreational amenities, community services and public transportation.

An artist’s rendition of the 161,871-square-foot Nexus Properties Inc. biotech research and development center.

Pacific Cornerstone Architects serves as the project architect.

"We have had a tremendous response (and) interest from local biotech companies as well as global pharmaceutical tenants," said Tom Mercer of Colliers International, which is helping to lease the project.

But real estate officials around the county say the Nexus project is something of an anomaly. Construction of new spaces designed specifically for biotech has largely stopped, some say due to a saturated market, others say due to changing business practices in the biotech industry. The trend now is for remodeling projects, or building for a specific company.

"Nobody can really justify building a new building just for biotech right now," said Craig Knox, vice president of Irving Hughes, a company that helps tenants negotiate leases. "We're in a little bit of a bust right now."

Not everyone sees the market quite as downtrodden as Knox, who works in tenant advocacy, but most agree that construction of new space is down.

"There have been a lot of deals done, a lot of biotech improvements projects, but as far as new construction, its virtually non-existent," said Dave Odmark, principal and office division specialist with Grub & Ellis/BRE in San Diego.

While there may not be new buildings going up, that doesn't mean there is no construction under way. More companies are focusing on remodeling, or building for specific companies, rather than speculative building. Mercer said he knows of small projects all over Sorrento Valley, in Carlsbad and other areas.

Two bigger projects are being constructed by Alexandria Real Estate Equities and Veralliance Properties, in the Torrey Pines area and Campus Point, respectively. These large projects are remodels of existing properties.

Little new space is being built, according to Odmark, because there's already enough lab space.

Knox said he sees a glut of existing lab space and also a shift in the way biotech companies conduct business as the leading factors in the lack of new construction. More and more local biotech companies are outsourcing their lab work, he said. The main headquarters don't need specialized office space; they can work in the same environment as an insurance company.

"It's going to be unlikely that we're going to see big construction of new space going up (in the near future)," Knox said.

Brian Cooper, associate director of Cushman & Wakefield in San Diego, agreed with Odmark that the existing lab space is sufficient for the market. It's more cost effective for a company to move into another company's old lab, or remodel their own, if their needs change.

This is particularly true for the biotech industry, since lab space is expensive to build and tenants end up bearing most of the cost. Additionally, the nature of the industry means companies often don't see a profit for years after they're launched, if ever.

"With the inventory of stuff out there, why would you want to build it out of the ground?" Cooper said.

Reno is also in the construction phase of the BioMed Realty complex: a four-story facility with 85,000 square feet of lab and office space with a 65,000-square-foot parking area. Both the Arena Pharmaceuticals building and the BioMed structures are in line for LEED certification through sustainable green construction and material use by the Reno Contracting team.

Towne Centre Drive consists of three buildings improved with laboratory and office space. The property is located within minutes of UCSD, Scripps Hospital and the Torrey Pines science / research market and has ocean and canyon views. The property is fully leased to Illumina, Inc., a public company specializing in the development of tools for the large-scale analysis of genetic variation and function. The property includes undeveloped land upon which an additional 84,000 square foot state-of-the-art building is being constructed, which shall be fully leased to Illumina upon completion.

Reno is currently constructing the corporate headquarters facility for ResMed Inc., a developer and manufacturer of products for the diagnosis and treatment of sleep-disordered breathing. The initial phase, which is a 500,000-square-foot, six-story building, including a parking structure, is designed to accommodate the company's long-term growth.

Reno Contracting has been selected as general contractor for the new $100 million corporate headquarters for San Diego-based ResMed, a manufacturer of medical devices. Construction on the project, located at the corner of Spectrum Center Boulevard and Paramount Drive in the Spectrum Center in Kearny Mesa, is slated to get under way in June, with Phase I scheduled for completion in the first quarter of 2009. Matt Reno, CEO of Reno Contracting, says his company is working closely with Allegis Development Services, the construction management and real estate development firm which is providing project and development management services for ResMed. Phase I of the ResMed project encompasses a six-story building that will span 250,000 square feet, with an additional 250,000 square feet slated for a precast concrete parking structure. A multi-phased master plan may include up to 500,000 square feet of new office space,

Davis Davis Architects designed the building. Other design team members are KMA Architecture and Engineering, Hope Engineering, Burkett & Wong Engineers, Hargreaves Associates and I.D. Studios.

User Response
0 UserComments