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Alexandria Boosts Mission Bay Play With $32M Buy

by Lizette Wilson
San Francisco Business Times

Biotech's future at Mission Bay just got bigger.

Alexandria Real Estate Equities -- the Pasadena life science REIT that counts Merck, Pfizer and Quest Diagnostics among its clients -- has purchased another two parcels of land south of SBC Park, bumping its San Francisco holdings from 1.4 million to 2.1 million square feet of space.

And it's all slated for biotech.

"It just closed," said Catellus Commercial Development Corp. President Ted Antenucci, confirming the sale price of $32 million, for the plots just behind the Gap building.

Alexandria CEO Joel Marcus declined to comment on the purchase, citing SEC regulations, but indicated he remains passionate about building the Bay Area biotech market with University of California, San Francisco serving as a catalyst.

Said Marcus: "We view UCSF as a crucial element."

Alexandria had acquired its previous land from Catellus in two transactions last September and October. Its holdings now wrap around UCSF's 43 acres in the core of San Francisco's newest neighborhood.

The 705,000-square-foot addition on the eastern flank makes Alexandria one of the city's largest landlords and cements the company's already powerful presence in the Bay Area biotech market.

Planning to break ground on a 165,000 square foot building at 1700 Owens St. next quarter, the Pasadena powerhouse plans to first lease to small, early-stage biotechs. That first building, which should be completed in mid-2006, will be five stories. Roughly 33,000 square feet -- or one floor -- will be divided up into mini-labs for very early stage companies eager to locate across the street from UCSF and the Gladstone Institute.

As those companies grow, Alexandria will likely build space to suit, possibly tapping tenants now located in their other life science clusters in San Diego, Massachusetts, New Jersey, Washington, D.C., and North Carolina.

The 11-year-old company hauled in $183.3 million in revenue and $60.2 million in net income in 2004, pops of 14.1 percent and 1 percent, respectively, from the previous year.

Although the Owens Street project will be perhaps the most visible at Mission Bay this spring, it's by no means the only activity. Four separate entities are either preparing to or have already signed letters of intent to purchase four separate parcels entitled for 192, 158, and 100 residential units and 550,000 square feet of commercial space, according to a transaction activity log generated by Catellus.

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