Lab Signs $47M Sale-Leaseback

The lab operator's new headquarters will be a 198,000-sf building on a 14-acre site at Tourney Road in the Valencia Corporate Center, according to Jerry Porter of the Los Angeles office of Cresa Partners. Porter and Matthew Miller of Cresa's L.A. office represented Specialty in acquiring the property two years ago, and Cresa has shepherded the development of the site since then. Project manager Reid McCartney in the L.A. office of Cresa has overseen the project's development by Lowe Enterprises as a fee developer, with HLW Architects as the designer. In addition, Cathy Sweeney and Brant Bryan of Cresa's capital markets division in Dallas negotiated the sale-leaseback with Lexington.

Porter tells GlobeSt.com that construction is completed on the shell and core of the new Specialty headquarters, where the lab operator will be doubling the amount of space it occupies. The build-out will be extensive because it will include sophisticated lab equipment and other specialized tenant improvements. As the build-out progresses and is completed in the third quarter of this year, Specialty will relocate gradually from about 95,000 sf of leased space at four separate facilities in Santa Monica.

Porter tells GlobeSt.com that the new headquarters and lab space will provide Specialty with visibility along the 5 Freeway near the Magic Mountain Parkway exit, with views of the Valencia Country Cub golf course. Besides consolidating Specialty's operations in one modern facility, Porter notes, the relocation to Valencia will provide a location that is convenient for the lab operator's work force both in terms of commuting and proximity to affordable housing.

The sale-leaseback with Lexington, a REIT, is expected to close before the end of the first quarter. Under the agreement, Lexington is purchasing the land and building, and will provide partial funds for the build-out of the facility.

Dr. Douglas S. Harrington, CEO of Specialty Laboratories says the new space will provide a state-of-the-art facility with the "capability to handle future growth with greater efficiency." The move from Santa Monica to Valencia will be conducted in stages, with administrative functions likely to be transferred first, followed by the phased transfer of the clinical and research laboratories beginning in the fourth quarter of 2004 and continuing into 2005.