Biotech giant Amgen is currently marketing a 100,000-square-foot sublease of its life science offices and labs in San Carlos. The company has listed the fifth and sixth floors of a building at 835 Industrial Road for sublease, with an asking rent that was not disclosed. This move comes after the Thousand Oaks-based biotech firm assumed ChemoCentryx’s 10-year lease for 96,500 square feet when it bought the smaller drug maker in 2022 for $3.9 billion. However, due to investor retreat from life sciences in 2021, the industry has not fully recovered.
Life science companies have been forced to vacate labs and offices, trim their drug development programs and lay off workers. Some have even closed down shop altogether due to an inability to raise enough money. Pfizer put up 91,400 square feet for sublease in South San Francisco after laying off workers, while Codexis shed a 10-year lease it signed in 2021 at Alexandria Center. Atreca reworked its lease with Alexandria, which found a new taker in Cargo Therapeutics, a cancer cell therapy firm. Boston-based SmartLabs also shut down on 225,000 square feet of biotech labs in South San Francisco and took its marbles back to the East Coast.
The ballooning sublease market has contributed to Bay Area biotech vacancy rates exceeding more than 20 percent. Subleases are being offered with discounts ranging from 30 to 40 percent from office spaces that commanded nearly $90 per square foot just a couple years ago. Despite this trend, developers are still constructing more than seven million square feet of life sciences buildings across the region.
In conclusion, Amgen’s decision to market its life science offices and labs for sublease marks yet another example of how investor retreat from life sciences has affected the industry’s growth prospects. The ongoing construction of new life sciences buildings suggests that there is still demand for space within this sector despite challenges such as rising costs and reduced investment opportunities.
Biotechnology companies have faced unprecedented challenges over the past year as investors have begun withdrawing their investments from this sector due to concerns about regulatory hurdles and declining profitability margins.
In addition to these factors, other trends such as increased competition among biotechnology firms have also contributed to this decline in demand for space within this sector.
Despite these challenges, however, some experts believe that there is still potential for growth within the biotechnology industry if companies can find ways to innovate and adapt quickly enough to changing market conditions.
As such, it remains to be seen whether Amgen will be able to successfully sell its subleased space or whether other companies will follow suit by putting their own excess office space on the market.
One thing is certain though – as long as there are investors willing to take risks on new technologies and innovative ideas within biotechnology
