Gene editing firm Graphite Bio has paid $58 million for an early exit from its South San Francisco headquarters, just months after announcing plans to cut its workforce by 50 percent.
In January 2022, the company signed a 10-year commitment for the bottom three floors of Nexus on Grand, a five-story, 141,000-square-foot lab and office property located at 233 East Grand Avenue. The firm and its landlord, Denver-based REIT Healthpeak Properties, agreed to a lease modification for its 85,200-square-foot space this month, according to a Healthspeak filing with the Securities & Exchange Commission. The agreement changes the expiration date of the lease to Dec. 31 next year.
Graphite Bio has already subleased a 32,000-square-foot portion of its space to Soleil Labs, according to the company’s filing with the SEC. The drug discovery subtenant has one year left on its sublease. Once the deal expires, the subtenant will become a direct tenant of Healthpeak for another six years, the filing shows.
The $58 million figure is equivalent to five years of rent payments and operating expense reimbursements under the terms of the lease. The amount includes a $21 million tranche that covers future rent credits for the subtenant.
When the lease was announced, Graphite Bio was set to vacate its 19,000-square-foot space at Alexandria Real Estate Equities’ 201 Haskins Way. Aside from the Nexus on Grand deal, the firm also reportedly subleased 20,000 square feet in an unidentified property.
The deal comes months after Graphite Bio’s board approved a corporate restructuring that includes the discontinuation of its research on sickle cell disease. In February, the firm said that it would cut its workforce to “reduce cash burn.” Josh Lehrer, Graphite Bio’s CEO, did not respond to a request for comment.
Graphite Bio’s early exit comes as leasing activity for life science properties in the Bay Area continues to drop. In the second quarter, net absorption for the sector stood at negative 466,000 square feet, according to a CBRE report. This figure is expected to decline further, with the supply of life science properties expected to expand by around 10 million square feet in the coming months.