By Meghan Hall
The life sciences craze is increasingly expanding beyond South San Francisco and the Peninsula to the East Bay. At the end of September, REDCO Development submitted preliminary plans to construct a 210,000 square foot life sciences project in West Berkeley. The project, if approved, would bring hundreds of additional jobs to the City and provide additional space companies to grow.
The project site is located at 742 Grayson St, but the address will be changed to 700 Grayson as the development progresses. Early plans indicate that the development will include 187,000 square feet of research and development space, as well as an 18,327 square foot terrace. A seven-story parking garage with 362 spaces is also planned.
REDCO originally purchased the property for an undisclosed amount in 2017 as part of an off-market deal. Currently, the 2.5-acre project site is developed with two commercial buildings: a 35,000 square foot former warehouse and a 7,500 square foot office building. In the spring, REDCO leased the buildings to the City of Berkeley for 18 months. City documents indicate that the property is being used as an emergency homeless shelter for 50 of Berkeley’s unhoused residents. The City began looking for additional accommodation for its unhoused population after the 2019 Alameda County Point in Time Count identified 813 unsheltered individuals living in Berkeley, and the number of unhoused persons was rising as a result of conditions caused by COVID-19.
The property currently provides 45,000 square feet of indoor space that can accommodate social distancing and indoor tents. The City leased the asset from REDCO for about $16,500 per month, including utilities.
Entitlements for the project are expected to take at least a year, and REDCO is working with local officials at other locations to rehouse the site’s current residents when construction begins.
The life sciences industry continues to grow exponentially, and the industry continues to “shatter” records for employment and funding, according to a mid-year report by CBRE. Over the past several years, the industry has recorded 16 percent job growth. Venture capital funding hit a quarterly record at the beginning of the year, reaching $10 billion, more than double the amount raised during the first quarter of 2020. Demand for life sciences space, as a result, has grown 34 percent across major markets, with the San Francisco Bay Area specifically reporting vacancy of just 2.4 percent–the lowest in the nation. The Emeryville and Berkeley submarkets have a vacancy rate of just 2 percent for 2.5 million square feet of inventory. CBRE also highlights Berkeley as the number two school behind Harvard for life sciences-related PHDs.
Developers and commercial real estate experts like REDCO have taken note. 742 Grayson, for example, is well-located for life sciences development, close to major educational institutions like U.C. Berkeley and the Berkeley Lab, also known as Lawrence Berkeley National Laboratory.
A number of other projects in Berkeley are also in the works. In June, local officials approved the construction of an 8.67-acre research and development project at Aquatic Park. Pitched by LB2 and Lane Partners, the project will include up to 500,000 square feet of space. In April, Oxford Properties Group acquired Foundry31 for $173 million and announced its intentions to convert 100,000 square feet to lab and life sciences uses. Bayer’s $200 million cell therapy facility–totaling 98,000 square feet–is also nearby.