A privately held Massachusetts developer has acquired its second major life sciences property in New Haven, Conn., and is planning to revive the nearly vacant property through a renovation intended to attract startup companies as well as a “significant” but as-yet-unknown presence from Yale University.
Winstanley Enterprises of Concord, Mass., has acquired for $14.5 million the ground lease for the 270,000-square-foot 25 Science Park (150 Munson St.) from BioMed Realty Trust. The publicly traded real estate investment trust based in San Diego gained control of the building in February, as part of a $511 million acquisition of ground leases from Lyme Properties of Hanover, NH.
“We plan on completing the base building work and then breaking the building for multi-tenant lab users, starting with a number of incubator spaces,” Carter Winstanley, a principal of Winstanley Enterprises, told BioRegion News on Oct. 31.
He said the developer plans to build “at least four” incubators that will range between 2,500 and 5,000 square feet each. “We’ll start out with those four. And if there’s a need, we’ll build more,” he said.
“I better have them online by April, because I already have some tenants that are already interested,” Winstanley added.
He would not disclose the cost of the repositioning.
Winstanley said he expects prospective tenants for the early-stage space to emerge “primarily” from spinout companies created by researchers at nearby Yale University. Yale spinouts comprise much of the tenant base for Science Park as well as Winstanley’s 560,000-square-foot 300 George St., which the developer acquired in 2000 when occupancy was just 5 percent. At 300 George, Winstanley has four incubators of 5,000 square feet each.
“There are also a number of non-Yale startup companies who have just been aggregating in the area because of the cluster that’s established here,” he said.
Winstanley said Yale “has made a substantial commitment to the building to help us jump-start it” — in the form of a nearly $13.28 million mortgage loan toward the purchase of 25 Science Park. He said it has not been determined how much space Yale would occupy at the building as a result, adding: “It will be a significant portion.”
Gila Reinstein, a Yale spokeswoman, said the university “isn’t ready to announce anything at this point” about 25 Science Park.
However, back in June, Yale President Richard Levin told BioRegion News the university was in talks for 100,000 to 150,000 square feet at Science Park, as part of an expansion of its life science activity in the New Haven region [BioRegion News, June 18].
Yale is already the anchor of the region’s life sciences cluster. The university’s presence will expand over the next several months once it moves into the 136-acre Bayer HealthCare campus, about 80 percent of which is in West Haven, Conn., with the remainder in the neighboring town of Orange, Conn.
The campus consists of 550,000 square feet of lab space, as well as 600,000 square feet of manufacturing and warehouse space, and 275 square feet of office space. In all the campus has 17 buildings built between 1968 and 2002. Bayer has begun moving out its oncology research facilities and some 700 employees, and plans to complete the pullout next year as part of a global consolidation following its €16.9 billion ($24.5 billion) purchase of Schering last year.
On Sept. 25, Yale closed on its $109 million acquisition of the campus, where it has said it will expand its biomedical research programs — an expansion Yale figures to accelerate by at least 10 years now that it has the space. At $72.67 a square foot, the university gained lab space at a proverbial bargain, since it previously projected the cost of building new lab space at $650 to $700 per square foot.
Reinstein said Yale is not set to occupy the campus until Bayer ends all operations there, something expected to happen early in 2008. A Bayer spokeswoman did not return a BioRegion News call seeking comment on the acquisition and timing of a pullout.
25 Science Park is part of Winstanley’s 4 million-square-foot real estate portfolio in Connecticut, where it has done business for 12 years. In addition to biotech and more general or “flexible” research and development space, the developer’s holdings include office, warehouse, manufacturing, and retail properties.
Unable to Expand
Winstanley told BRN that an inability to expand the practically full 300 George prompted his company to seek additional life sciences space in New Haven by acquiring the ground leases for the BioMed properties.
“I felt there’s a strong connection to 300 George Street, in that it is the other primary lab facility in town. Given that 300 George St. is essentially 100 percent leased, it made a logical jump to [acquire] another building, and Science Park is really the best candidate for that,” Winstanley said. “I think it probably ends up feeding tenants into 300 George.”
He said he did not view Science Park as a stepping stone to 300 George, as much as “another building to continue to feed the cluster and develop the massing” of life science companies in the New Haven region.
25 Science Park is part of the 80-acre Science Park, owned by Science Park Development Corporation. Despite the completion of a $30 million renovation project by Lyme in 2003, the building is only 10 percent occupied by three tenants — the corporation; Connecticut Innovations, a quasi-public investor in startup tech businesses; and Higher One, a provider of refund management services to colleges and universities, and banking services to their students.
Winstanley said his company would follow its general strategy of leasing space below market at 25 Science Park, but he would not disclose the asking rent. Last year a 5,698-square-foot space at the building was marketed online at $18 per square foot plus utilities by the Connecticut Economic Resource Center, a nonprofit, utility-funded group formed to promote economic development in the state.
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“We welcome this sale. We think Winstanley Enterprises is the one to really develop it based on their track record at 300 George St., so we’re pleased that this occurred and we certainly granted our permission.” |
To prevent a parking shortage should Winstanley succeed in filling 25 Science Park, the city has swapped land with BioMed Realty Trust with additional space for cars in mind, New Haven’s economic development administrator Kelly Murphy said in an interview. The swap gives the city a Winchester Avenue parcel that can be used for temporary parking, and can be redeveloped with a parking structure longer term, she said.
David Silverstone, president and chairman of Science Park Development, said Winstanley’s arrival should not only help fill the mostly vacant building, but also help draw tenants to the rest of the research campus still controlled by the public-private corporation.
“We welcome this sale. We think Winstanley Enterprises is the one to really develop it based on their track record at 300 George St., so we’re pleased that this occurred and we certainly granted our permission,” Silverstone said.
While 25 Science Park has languished, Science Park has filled two other buildings totaling 148,000 square feet, 375 and 396 Winchester Ave. (also called buildings 4 and 5), primarily with biotech tenants. Silverstone said one reason for that success was Science Park’s greater willingness than Lyme to subdivide space into the blocks of a few thousand square feet required by early-stage companies.
Winstanley closed on its acquisition of 25 Science Park in late September, but the deal wasn’t disclosed until last month, when the commercial real estate brokerage Colliers Dow & Condon included the deal in its third-quarter office market report [BioRegion News, Oct. 22].
News of Winstanley’s acquisition came just days before the Oct. 17 deadline for responses to a formal request for qualifications issued by Science Park Development. The corporation is looking to sell another piece of the campus — a 7.3-acre parcel called Tract A (275 Winchester Ave.), consisting of 15 industrial buildings totaling a million square feet. The site is bounded on the east by Mansfield Street, on the south by Munson Street, on the west by Winchester Avenue, and on the north by Science Park tracts D and E [BioRegion News, Sept. 17].
Silverstone said he has spoken to members of New Haven’s board of aldermen about a redevelopment concept for tract A that would entail “primarily residential with some office, and maybe some biotech uses.” Residents are expected to include some employees of nearby life science companies, he added.
“Everybody seems to think it’s a good idea in concept, and now we have to provide the specific plans,” Silverstone said. “We really see this as a whole community.”
Neither Silverstone nor Murphy would disclose the three finalist developers for Parcel A — though Murphy said the board of aldermen would soon begin deliberations, with the goal of selecting a developer by the spring.
“We have interviews set up some time before the end of the month,” Murphy said.
Those interviews may lead the aldermen to request additional information of one or two of the developers, she added. The aldermen will also continue outreach to civic groups, in hopes of building public support for the redevelopment plan it eventually selects.
Winstanley Enterprises did not complete the RFQ and is not looking to develop Parcel A. The developer has not ruled out expanding its holdings in Science Park, but won’t do so too quickly.
“I think we’re going to take it one building at a time down there,” Winstanley said. “I would have interest in looking at almost anything down there. We think it’s a great market.”