By Meghan Hall
The City of Vacaville has been vying for a biotech presence of its own for nearly two decades, and thanks to a recent deal, its efforts are finally becoming a reality. Lexington, Mass.-based Agenus Inc. has acquired 120 acres in Vacaville for future expansion and paid $18 million for the site, according to Marcus & Millichap, who helped broker the deal.
“It’s huge,” said Russ Moroz, First Vice President with Marcus & Millichap. “The land itself is one of the most strategic pieces of development property along Interstate 80 West of Sacramento all the way to San Francisco. There is not much like it out there.”
The seller of the property was A.G. Spanos, a local property owner and developer.
In addition to Moroz, Marcus & Millichap’s Vince Schwab helped to represent A.G. Spanos in the deal. Cushman & Wakefield’s Brooks Pedder represented Agenus.
The site already had basic infrastructure, and its proximity to biotech giant Genentech’s campus, were also key considerations for Agenus. The property is also fairly close to the Vacaville Premium Outlets, with shops such as Adidas, Gap and Express, Nut Tree Airport and the West Elm Outlets. A Kaiser Permanente Vacaville Medical Center is also located adjacent to the property.
According to Moroz, the property attracted a significant amount of interest from a multitude of different parties, with potential buying entities “ready to go hard,” in an effort to procure the site. Original guidancing pricing for the asset had been set at just a bit over $18 million, said Moroz, although some bidders were potentially prepared to pay more.
“We had just an absolute flurry of interest on this from developers across different spectrums,” said Moroz. “Almost everyone we had talked to had different visions for the site.”
The asset’s former owner, Spanos, however, recognized the City’s strong desire for an established biotech presence within its bounds. Knowing how long the City had been hoping for a company such as Agenus to establish a presence there, Spanos ultimately accepted the biotech company’s offer. Spanos did not want the City to lose out on the opportunity, noted Moroz.
“Spanos knew the City had been absolutely desiring and hoping and praying to get a biotech company,” he said.
Spanos’ decision is a significant one in the context of the hot Northern California real estate market. Desire for life sciences assets–or land to develop life sciences properties–often comes with high levels of competition. Within the limits of the Bay Area, companies must be prepared to put their best offers forward to acquire property in such a supply-constrained market.
The competition–and the pricing–is what is prompting some firms to look elsewhere. Additionally, Vacaville’s location between two major research institutions, U.C. Berkeley and U.C. Davis, will still give companies such as Agenus access to an educated workforce.
“[Several years ago]…we had only heard rumors about companies moving outside of those market areas,” stated Moroz. “What I think really solidifies this decision [for companies] is the affordability outside of markets like San Francisco and South San Francisco.”
Agenus’ plans for development of the property and its timing for build-out have yet to be solidified. However, the company is already speaking with another of other biotech firms looking to establish a presence on the site and contribute to build out. Moroz declined to comment on which companies are currently in talks with Agenus, stating that the negotiations are ongoing.
“It is a very logical location for a biotech company to come in here and expand their presence,” said Moroz.