By Meghan Hall
Kodiak Sciences, a biomedical company that develops novel therapies for retinal disease, has plans to expand into a new headquarters. According to SEC filings dating to June 19, Kodiak has signed up to take more than 155,000 square feet of space on Page Mill Road in Palo Alto. The deal was struck with 1050 Page Mill Road Property, LLC, affiliated with local developer Sand Hill Property Company.
Public filings show that Kodiak has leased two buildings, one at 1200 Page Mill Road and a second at 1250 Page Mill Road. The two properties are 82,622 square feet and 72,812 square feet, respectively, and Kodiak plans on using them as its new corporate headquarters for research laboratories and office space.
The lease for 1200 Page Mill Road will begin at the beginning of August of this year, with a lease term of 6.5 years. Monthly rent at the beginning will be about $600,000, with annual year-over-year increases of three percent. A tenant improvement allowance for the building, totaling about $1.2 million, will be provided by the landlord, as will 24 months of rent abatement.
Kodiak’s lease for the second building at 1250 Page Mill Road was expected to begin in July, with an initial monthly rent of $500,000 and annual year-over-year increases of three percent. Rent abatement for the first 12 months after the commencement date is also included and valued at about $6.3 million. Tenant improvement of about $10.6 million will be provided by Sand Hill Property Company. Kodiak’s lease of the building is expected to last 13 years.
Kodiak’s new home is part of a four-building portfolio owned and developed by Sand Hill Property Company on a 13.5-acre site known in City documents as “1050 Page Mill Road.” The Class A buildings will surround an open landscaped courtyard, and the project totals 265,895 square feet of floor area.
Leasing activity in Silicon Valley reached its lowest levels in 16 years, making Kodiak’s space commitments the largest of the quarter, according to a second quarter Silicon Valley office report released by CBRE. Uncertainty around space needs in both the short- and long-term and shelter-in-place restrictions led to many companies pressing pause. The technology and biotech industries—of which Kodiak Sciences is a part—were responsible for 74 percent of leasing activity during the second quarter. Other leases included TATA Consultancy Services, who leased 76,868 square feet, and Infoblox, who took 42,118 square feet. Both leases are for Santa Clara properties.
At the end of the second quarter, the total vacancy rate in Palo Alto sat at 5.1 percent, and asking rates came in $9.42 per square foot. Fundamentals across Silicon Valley have remained relatively stable, said CBRE, meaning that in the future the market may be better poised to weather headwinds caused by the current pandemic.