A once-vacant Sorrento Mesa office building that had fallen into disrepair has been resurrected as a showcase building for biotech by a San Diego County developer that specializes in providing space for the life science industry.
BioScience Properties based in Del Mar spent $20 million overhauling the building at 10770 Wateridge Circle after acquiring it in May 2018 for $28.8 million and giving it a new name — TEN770 marking its address.
“It wasn’t a great building for life science,” said Steve Bollert, president of BioScience Properties.
‘Inside It Was a Mess’
“It was an older, worn down, 180,000 square-foot building that sat vacant for two-plus years,” Bollert said. “Inside it was a mess.”
The building was in such poor shape that other developers shied away from it or weren’t prepared to pump the amount of money that BioScience Properties invested in it.
“It was a heavy lifting project and not everybody wants to do that. It’s a large construction project. It takes a lot of time and effort and a great team to be successful,” Bollert said, adding that he was attracted to the building because of its location in what’s becoming an increasingly hot submarket for life sciences.
“We got a little lucky in our timing but we hung around this building for a year before we were able to convince the seller to sell it,” Bollert said. “We finally got to a price that made sense and we were able to close quickly.”
The renovation project was designed by Macfarlane Architects and Carrier Johnson + Culture. BNBuilders was the general contractor.
About 60 percent of the building was preleased prior to construction to Maravai Life Sciences.
The building had been used for office space, but Bollert said that the demand for office space in Sorrento Mesa wasn’t especially strong when the building was put up for sale.
He said that the structure also isn’t particularly suitable for offices because of its large floor plates.
“San Diego is not a large floor-plate office market,” Bollert said.
BioScience tore the roof off the building, gutted it and tore out the concrete floor though a portion of the structure.
“We took the center of the building down to dirt and built it back up with a more robust shell that will accommodate life sciences,” Bollert said. “We needed to make sure we built a good building for life science. We had to take all the (interior) structures out.”
The roof was raised to give 18-foot tall ceilings on the second floor of the two-story building and reinforced so it would hold specialized air handling systems needed by biotech firms.
“We put a lot of weight on the roof,” Bollert said.
New Facade
On top of the structural changes, “we put a whole new façade on the front of the building,” Bollert said.
“We basically have an open building from the lobby all the way back to the right side of the building,” Bollert said. “It’s now a common area, two-stories tall, with light coming in the entire length of that lobby and interior corridor. We put furniture out there so people can flow from their interior spaces to that common area and use that as well.”
Amenities
Amenities added include indoor/outdoor gathering spaces, private balconies with fold-away walls, a café, a fitness center and landscaped areas set aside for food-truck service.
The renovation of TEN770 comes as demand for biotech space is intensifying.
“The San Diego life sciences sector is performing at an all-time high which has resulted in the growth and expansion of the life sciences base,” the commercial real estate brokerage Cushman & Wakefield noted in its third quarter 2019 report on the industry with San Diego ranking third in the nation as a biotech hub behind Cambridge, Mass. and the San Francisco Bay area.
“Despite concerns of a potential economic correction and the daily drama of politics and Twitter scares, the level of sciences investment remains unfettered,” Cushman & Wakefield reported. “Existing tenants continue to grow, and new companies continue to form and appear. As such, we are beginning to see Bay Area and East Coast VCs (venture capitalists) spend more time in San Diego, and some have chosen to formally open offices here for the first time.”
Chad Urie of the commercial real estate brokerage JLL said that “San Diego life science leasing velocity is very robust.”
Urie, Grant Schoneman and Tim Olson of JLL are in charge of leasing TEN770.
“We have close to 1.5 million square feet of demand for life science space pending, which represents 70 percent of the total demand for space in Central San Diego,” Urie said. “What makes this product type different from some office properties is just the nature of the (life science) companies. When they raise they raise capital around their business plan, speed to market is everything. They want to be up and operational quickly,” Urie said.
The Renovations
TEN770 is the latest of several renovations BioScience Properties has done targeting life science firms.
“It was one of our better before and after jobs,” Bollert said. “We wanted to create a life science campus environment within Sorrento Mesa that was on par with what tenants have come to expect in the high rent districts of Torrey Pines and UTC.”
Bollert said his company prefers to renovate older buildings rather than build from scratch from the ground up.
“It’s difficult to raze a building and start over,” Bollert said, adding that it takes longer to get a finished product compared to renovations.
In 2018 the company renovated an 83,000 square-foot building at 10220 Barnes Canyon Road and in December 2017 finished renovating a building at 6325 Lusk Blvd.
“We take opportunities like this and convert them into usable buildings and create value that way,” Bollert said.
