Alexandria Secures Early Lease Renewal at Bay Area Bio Campus

Alexandria Real Estate Equities Inc. has executed an early lease renewal and six-year extension with insitro, a machine learning–powered drug discovery and development company, for 143,188 rentable square feet in the Alexandria Center for Advanced Technologies – South San Francisco campus.

The six-year extension now carries the lease through August 2034. The initial lease by insitro at this location, 279 E. Grand Ave., was in 2018 for nearly 36,000 rentable square feet of lab space. The South San Francisco campus remains insitro’s headquarters and R&D site.

The lease extension, Alexandria stated, “highlights the need for laboratory space to generate the large datasets that power AI capabilities in the discovery and development of new medicines.”

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The campus features a conference center, café and lounge, walking paths and access to adjacent transportation hubs.

The two companies have been closely connected from the beginning, according to a recent article in Genetic Engineering & Biotechnology News, with Alexandria investing in insitro’s Series A financing in 2018 and also in later financings.

Joel Marcus, executive chairman & founder of Alexandria Real Estate Equities, told the publication that insitro is building a mini–data center of roughly 10,000 to 15,000 square feet to facilitate the use of AI for discovery of new molecules. It’s a model, Marcus said, that’s likely to be adopted by other life science companies that use AI in drug development.

Rising vacancy

Alexandria has been living up to its powerhouse reputation in recent months. The developer:

•  Landed a lease extension last month from an affiliate of Takeda Pharmaceutical Co. for a 223,000-square-foot space at the Alexandria Center at Kendall Square campus in Cambridge, Mass.

•  Last December, signed a long-term lease with Novo Nordisk for all of a 165,940-rentable-square-foot building at 60 Sylvan Road on its Alexandria Center for Life Science – Waltham campus in metro Boston. The building is currently under redevelopment and expected to deliver in 2025.

•  Also in December, executed a long-term lease with CARGO Therapeutics for 99,557 square feet of space in the Alexandria Center for Life Science – San Carlos campus, in San Carlos, Calif. CARGO is a clinical-stage biotech company that focuses on developing next-generation cell therapies for cancer patients.

The Bay Area’s life science space market has been loosening, with an overall vacancy of 16.1 percent, after a lengthy period of conditions favorable to landlords, according to a February report from Cushman & Wakefield. That balance seems unlikely to swing back, because about 6.2 million square feet are under construction and more than a further 16 million are in planning, most of both primarily speculative, as against a current inventory of 46.4 million square feet.