Shorenstein Confirms 239,000-SF Biotech Deal

SAN FRANCISCO-Shorenstein Properties LLC of San Francisco and drug maker FibroGen have confirmed details of a 239,000-sf lease that will move the drug maker into Shorenstein’s new 450,000-sf Mission Bay development, a deal first reported on GlobeSt.com in August. Terms of the deal were undisclosed, but industry sources estimate its value at $175 million.

The parties say the build-to-suit agreement for the headquarters and R&D space at 409 Illinois St. in Mission Bay is one of the largest biotech leases ever signed in San Francisco. The deal will move privately owned FibroGen from 106,000 sf of leased space at 225 Gateway Blvd. in South San Francisco into the new space in the fourth quarter of 2008.

FibroGen, which makes drugs for treating anemia and a host of other diseases including diabetes, needs the new space to accommodate its rapid expansion. The company is on “an aggressive growth track over the next several years,” according to Thomas Neff, CEO of FibroGen, which employs about 190 workers.

The FibroGen building at 409 Illinois St. will be part of a two-building life science campus development planned by Shorenstein for a 3.8-acre parcel of waterfront land that the real estate investment company acquired last year as part of the Mission Bay master-planned development. The 211,000-sf second building in the project, at 499 Illinois St., will also be available for the drug maker’s expansion.

FibroGen’s existing headquarters space in South San Francisco is a leased facility. A FibroGen spokesperson tells GlobeSt.com that the company most likely will market the 106,000-sf for sublease after it moves to Mission Bay.

The Shorenstein parcel, which previously was the site of an Esprit clothing warehouse, is two blocks from the University of California San Francisco Mission Bay teaching and research campus and close to the financial district, with views of the San Francisco Bay. Shorenstein acquired the property with entitlements in place from ECOR-SF Holdings Inc.

FibroGen was represented by Randy Scott of Cornish & Carey Commercial’s Palo Alto office, with Shorenstein Properties represented by Charles Malet, Tom McDonnell and Jim Collins of Shorenstein Realty Services LP.

Shorenstein Properties and its development manager, SKS Investments, plan to begin construction this fall. The development team also includes Dowler-Gruman Architects and Hathaway Dinwiddie Construction Co.

The Mission Bay submarket is a 303-acre, mixed-use development that at build-out will include 6,000 units of housing; five million sf of office, R&D and lab space; 800,000 sf of retail space; a 500-room hotel; 50 acres of open space; a 500-student public school and a police and fire station.

A significant portion of the office space is being developed by the University of California at San Francisco, which is building a $1.5-billion biomedical research and teaching center with 2.65 million sf of facilities. Another 1.4 million sf is being developed by publicly traded life sciences REIT Alexandria Real Estate Equities.