BioPharm Firms Inks 447,000-SF HQ Lease

PDL is currently housed in a mix of owned and leased buildings in Fremont, which sits just across the San Francisco Bay from Redwood City. At Pacific Shores Center, it will occupy 1500 Seaport Boulevard, a 164,000-sf building currently in shell condition that will be built out as lab space, and 1400 Seaport, a 283,000-sf fully finished and furnished building that that will house its administrative offices.

PDL is subleasing 1400 Seaport from OpenWave Systems Inc. for the first seven years. The sublease will convert to a direct lease with Jay Paul upon expiration and will run co-terminus with the 1500 Seaport lease, both expiring on Dec. 31, 2021. The negotiated lease rates were not released by the parties involved; the published triple-net asking rate for 1500 Seaport is $1.75 per sf per month.

The deal was brokered by Cornish & Carey Commercial/ONCOR International. C&C's Client Solutions Group, led by Kevin Manning, analyzed PDL's needs, identified its space options and ultimately negotiated the leases. C&C executive vice president Phil Mahoney represented Jay Paul. Manning tells GlobeSt.com that the search for space and the ultimate lease agreement follows an "exhaustive" financial and logistical analysis to determine exactly what PDL was looking for and what it should cost.

"There aren't many of these properties around," Manning says. "The vast majority of spaces we looked at weren't spaces at all, they were dirt. If forced, they were willing to wait for the right space; but in the end, because it was available and it met PDL's strategic objectives, both financially and in terms of being able to retain employees from a geographic perspective, they chose Pacific Shores."

Backing up to 135-acres of restored wetlands, Pacific Shores is a multi-tenant, 106-acre campus with the amenities of a high-end corporate campus such as Nike's in Beaverton, OR. The campus includes a 38,000-sf fitness facility with a 25-foot rock climbing wall, a game room and a lap pool, among other things. Additional amenities include baseball and soccer fields, indoor and outdoor volleyball and basketball courts, jogging and biking trails, high-end food service, a day spa and on-site dental service. Existing tenants at Pacific Shores include DreamWorks Animation Inc., Symantec Corp. and Threshold Pharmaceuticals Inc.

Following recent acquisitions and expansion, PDL chief executive Mark McDade says the company "is essentially out of space" at its current location in Fremont and the leases it holds for the majority of its space there expire in the near future.

"This new site should accommodate our staffing and operational growth necessary to achieve our Vision 2010 aims, notably to launch new products, build our pipeline and optimize sales of our marketed products in North America," McDade says. "Over the past two years, we have carefully evaluated numerous opportunities, including expansion at our current location, and we believe the new location enables us to pursue our objectives in the most cost-efficient manner. The new site is also a unique environment that will bring all of our California-based employees closer together in a setting that facilitates teamwork and communication."

PDL BioPharma currently has more than 1,000 employees, with approximately half based at its current headquarters in Fremont. In connection with the planned move, the company intends to sell the two buildings that it owns at its Fremont headquarters. PDL says it will provide an update on its plans related to the new headquarters, including anticipated capital expenditures, during its second quarter earnings conference call.

In addition to Manning, C&C's Client Solutions group includes SVPs Jay Phillips and Jay Belquist and executive vice president Mike Brand.