Amgen to sublease 100K sf of life science offices in San Carlos

Ballooning sublease market, plus new Bay Area projects, pushes biotech vacancy to 20%  

Amgen's Robert Bradway; 835 Industrial Road (Loopnet, Amgen, Getty)
Amgen's Robert Bradway; 835 Industrial Road (Loopnet, Amgen, Getty)

Pharmaceutical giant Amgen has listed 100,000 square feet of life science offices and labs for sublease in San Carlos.

The Thousand Oaks-based biotech firm is marketing for sublease the fifth and sixth floors of a building at 835 Industrial Road, the San Francisco Business Times reported. The asking rent was not disclosed.

The 278,000-square-foot building is among two towers at the Alexandria Center for Life Science, which once housed the headquarters for ChemoCentryx.

Amgen assumed ChemoCentryx’s 10-year lease for 96,500 square feet when it bought the smaller drug maker in 2022 for $3.9 billion. The lease was set to expire in 2030.

ChemoCentryx had signed the lease for more than $67 per square foot in the second half of 2019 as the biotech industry was expanding, according to the Business Times.

But investors began retreating from life sciences in 2021 and the industry has not recovered. 

Life science companies have vacated labs and offices, trimmed drug-development programs and laid off workers. Others have closed up shop, unable to raise enough money. 

This spring, New York-based Pfizer put up 91,400 square feet for sublease in South San Francisco after laying off workers.

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Codexis chose to shed a 10-year lease it signed in 2021 at the Alexandria Center, owned by Alexandria Real Estate Equities based in Pasadena.

And cancer drug developer Atreca reworked its lease with Alexandria, which found a new taker in Cargo Therapeutics, a cancer cell therapy firm. Now Cargo wants to sublease half of the 100,000 square feet it leased late last year.

In March, Boston-based SmartLabs announced it would shut the doors on 225,000 square feet of biotech labs in South San Francisco and take its marbles back to the East Coast.

The ballooning sublease market, along with new life sciences projects, has pushed Bay Area biotech vacancy to more than 20 percent, while leading to subleases with discounts from 30 to 40 percent, according to the Business Times.

Offices and labs that commanded close to $90 per square foot only a couple years ago are trading in the sublease market for $57.

At the same time, developers are constructing more than 7 million square feet of life sciences buildings.

— Dana Bartholomew

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