Biotech Development Site in Emeryville Sold at Discount

A life sciences development site in Emeryville traded at a steep discount, underscoring how far the East Bay’s biotech boom has fallen.

An entity tied to Graymark Capital bought the 128,000-square-foot building at 1650 65th Street for $26.9 million, or roughly $209 per square foot, the San Francisco Business Times reported. That price is roughly half of the $51 million PSAI Realty paid for the site in 2019 at the height of investor appetite for lab space.

The deal marks a reset for a property once slated to anchor a large biotech campus. Longfellow Real Estate Partners signed a 40-year ground lease with PSAI in 2021 to develop a 750,000-square-foot life sciences project dubbed Atrium Labs. Plans were later scaled back to 125,000 square feet as tenant demand softened.

In early 2022, Longfellow purchased a neighboring property at 6603 Shellmound Street that it planned to renovate into lab space. The firm later abandoned those plans, listing the property for sale in 2024. PSAI Realty terminated its ground lease with Longfellow in 2024 after it sued Longfellow, alleging it fell behind on more than $1 million worth of rent payments.

The vision for Atrium Labs came together during a market peak in the early 2020s when life sciences and biotech funding were at an all-time high and vacancy stood at less than 2 percent. Emeryville’s rents skyrocketed, and developers flocked to the city to convert office buildings into lab space or to build campuses from the ground up.

After funding began to decline around 2022, the pipeline of companies looking for large swaths of space dried up right as several large projects were delivered, sending vacancy skyrocketing. Emeryville’s research and development market reached a whopping 45.8 percent vacancy in the first quarter of 2026, according to CBRE. Federal funding cuts to research programs across the country have scared investors off even further.

The 65th Street purchase marks Graymark’s official entry into the Emeryville market. The San Francisco-based firm owns properties across Northern California in Fremont, Sunnyvale, Palo Alto and San Francisco, as well as other properties in Southern California, the Pacific Northwest, Texas and Hawaii. — Chris Malone Méndez