Wareham Specs 245,000-SF Lab Building

Wareham paid about $10 million for the property and is constructing the facility at a cost of approximately $400 per sf. Wareham principal Chris Barlow tells GlobeSt.com that the reason for the $100-million development risk is simple.

"We have about 1.2 million sf of life science space in the Bay Area and we have zero vacancy," he says. "The last two or three years, we have been able to accommodate growth by existing clients and service new ones. Now, without the new building, the problem we would have faced next was not being able to meet the next big requirement."

Wareham's existing clients include government agencies, such as the state department of Justice and Substance Control and the federal Environmental Protection Agency, and multinationals such as Novartis and Bayer. "This is a relationship business and you really need to have space on hand in order to let existing tenants grow and respond quickly to new ones," Barlow says.

The glass-clad building will have 64,000-sf floor plates and a 20,000-sf garden with fountains and sculptures. Amenities will include anti-vibration technology for the sensitive calibration needs in medical research, co-generation power systems for certainty of power supplies the latest in security systems. Site work for EmeryStation East began a few months ago. The parking structure is now under construction and the laboratory building should be going up by the end of August.

Broker Bill Nork, a senior vice president with Cornish & Carey has the leasing assignment. Nork tells GlobeSt.com the costly nature of lab buildings makes a speculative project of this size very unusual. "Wareham believes an opportunity exists because of the ongoing expansion in the life sciences industry," says Nork.

Already home to one-third of the Bay Area's 1400-plus bioscience and life science companies, the East Shore of San Francisco Bay--from Point Richmond south to Emeryville--has become a globally-respected technology research center. There are no other new projects in the immediate area to compete with EmeryStation East. The competition will come from the San Francisco Peninsula, especially the Mission Bay area, where Alexandria Real Estate Equities, Shorenstein Co. and Slough Estates have projects on the drawing board.

By having a big space available, Wareham likely will have a good shot at landing a life science, physical or nano science company that is new to the market or an existing one looking to consolidate multiple existing locations or expand from a smaller location, says Nork, who is marketing the property with C&C senior sales associate Jonathan Tomasco and C&C EVP Randy Scott.

The expected asking lease rate is between $3.50 and $4.40 per sf plus operating expenses. Barlow says that because of how much Wareham spends on the front end, the tenant is getting a higher initial build-out, which will make tenant improvements less costly. Barlow says Wareham is willing to spend more on its buildings because it plans to hold the buildings long term.

"We build to lease," he says. "In 30 years I think we've sold four buildings."