At the beginning of 2010, Dr. Razmik Abkarians and Dr. Blaine Ikeda began searching for commercial real estate in the greater San Fernando Valley area to house a pharmaceuticals manufacturing operation. The space needed to accommodate class 10,000 clean rooms with class 100 compounding vertical flow hoods, laboratories, emergency power systems, HEPA filter air conditioning systems, and more. The two also needed easy access to freeways for deliveries. “The type of work we do is very clean and it needed to be a new building,” said Abkarians, principal of PharmaRx Pharmaceutical, which has operations in San Luis Obispo and Hawaii. The radioactive products, used for diagnostic imaging and cancer therapies, expire in only a few hours. The duo secured a 4,500 square foot new space in the Canord Industrial Park in Chatsworth. They locked in an affordable lease rate, and the landlord is helping build-out the property to meet the company’s needs. Access to commercial real estate is a crucial part of growing a high-tech cluster. And according to local real estate professionals, a number of pockets in the Valley have plenty of suitable space for biotech, medical device and related companies. “What we’ve found is seldom do you end up having an existing building that works for their needs,” said Craig Peters of CBRE, who specializes in industrial real estate in the Santa Clarita Valley, adding extensive build-outs are common in these industries. “But I don’t think there’s a lack of space here.” Two hot spots for biotechnology and medical device companies are the Valencia/Santa Clarita Valley area, and communities in the western San Fernando Valley near the 101 freeway corridor, said Peters. Last year, medical device maker Advanced Bionics leased a new five-story 146,385 square foot space in Santa Clarita to house offices, a warehouse, laboratories and production facilities. At one point, MannKind Corp. did extensive tenants improvements to a 98,000 square foot industrial space in the area. Valencia properties Many biotech and medical device-type companies are gravitating to an industrial area known as the Valencia Gateway. And government officials welcome the move. “The key is to get local municipalities to work with you,” said Peters, adding Santa Clarita and Los Angeles County have made a point of providing quick turnaround for quality companies that bring quality jobs to the region. Abkarians originally planned on moving to the Glendale and Burbank area, but said zoning was an issue and many of the buildings were too old. He also looked in Van Nuys before choosing the Chatsworth building. Ron Kassan and Trevor Gale of Beitler Commercial Realty Services in Sherman Oaks represented PharmaRx and the owners of Canord Investment Company in the seven-year lease agreement. The 45,000 square foot multi-tenant industrial park received its certificate of occupancy in early April and is 50 percent leased, said Kassan. PharmaRx’s tenant improvements will take approximately two months to complete and cost $150,000 to $200,000. Some industrial property owners are hesitant to sign biotech, medical device and related companies because of the amount of improvements they require, said Kassan. They want to know companies are financially sound and that they will get a return on the investment. “This deal happened from a combination of the tenant being willing to participate in the cost of tenant improvements, and the owners being cooperative because they have a new project and are looking for reasonable tenants to fill the property,” he said. Wet lab space One area that needs a boost in the greater San Fernando Valley region, however, is the availability of wet laboratory space. Smaller start-up companies often need inexpensive rentable lab space because they don’t have the money to build their own. Greg Cauchon, president of Amethyst Life Sciences in Thousand Oaks, provides CMC drug development, management, and consulting services to biotech and pharmaceutical companies. “There’s a complete lack of (wet lab) space and it’s severely cramping the area,” said Cauchon. “It’s very expensive to construct.” There’s been talk about creating a facility for a long time, but the recession has slowed down progress, he said. People aren’t spending on infrastructure. And there’s been uncertainty about the stability of commercial real estate markets. The San Fernando Valley area has a lot of intellectual capital, certain communities have the money, and there are plenty of great ideas to go around. Somebody, or city, just needs to step in and invest, he said. On a potentially positive note, MannKind Corp. has excess capacity of laboratory space, according to the company’s chief financial officer Matthew Pfeffer. And it has raised the possibility several times of making the space available to start-ups and other firms. “If there’s a need…,” said Pfeffer.
Space Available In Valley Area For Companies
