August 2, 2023
BY CHARLOTTE SCHUBERT on August 2, 2023 at 10:39 am
A new science cluster is growing in Seattle.
The two 15-story towers of Dexter Yard, with 528,000 square feet of office and lab space, are starting to fill up with biotech companies and an outpost of the Allen Institute.
“This new complex is really becoming the new epicenter in South Lake Union for some of the most innovative companies in the field,” said Outpace Bio CEO Marc Lajoie at a reception Tuesday to celebrate the launch of his company’s headquarters in the new building, which opened last year.
Other tenants include single-cell sequencing company Parse Biosciences, gene therapy startup Shape Therapeutics and Monod Bio, which, like Outpace, has a focus on protein engineering. A new tavern is reportedly slated to open at street level and Outpace scientists say there are rumors of a bowling alley moving in.
Dexter Yard sits just across Lake Union from a complex of life sciences buildings anchored by Fred Hutchinson Cancer Center.
The new complex, built by BioMed Realty at 700 Dexter Avenue North, is across the street from the Mercer Mega Block, a 2.86-acre chunk of real estate slated for transformation into a life sciences campus by Alexandria Real Estate Equities.
The Seattle area has 1.6 million square feet of life sciences space under construction, with 53% pre-leased, according to a recent report from CBRE. Nationally, nearly 41 million square feet is under construction, propelled in part by record biotech investment in 2020 and 2021.
Outpace Bio, a spinout of cell therapy company Lyell Immunopharma, pulled in $30 million from investors in 2021. At the time, lab space was hard to find in the city, said Outpace chief technology officer Scott Boyken.
The vacancy rate for lab space in the Seattle area is now at 7.1% and leasing activity declined in the second quarter of 2023 to “a fraction” of the quarterly totals over the past two years, according to the CBRE report, as the biotech market cools after its pandemic highs.
The Dexter Yard project has about 220,000 square feet of potential lab space and about 280,000 square feet of offices, according to the Daily Journal of Commerce. In January, BioMed Realty told the Puget Sound Business Journal that 45% of Dexter Yard had been leased. GeekWire contacted BioMed for the current leasing status at Dexter Yard and will update the story when we hear back.
While the life sciences real estate market softens nationally, office vacancy rates are soaring in some cities as companies scale back their real estate footprints and workers spend more time working remotely. Office vacancy rates in the Seattle hit 19.3% during the second quarter.
At Outpace, the new space is drawing people in. “People have been just craving to interact with each other in person,” said Boyken. And while the 50-employee company gives people the option of working from home, some members of its computational and protein design team come in every day. “People have been so excited to be here,” said Boyken.
Outpace designs proteins for cell therapy applications and is taking the steps toward a clinical trial for an internal “CAR T” cell therapy candidate.
Outpace was able to design the roughly 22,000 square foot space — “just the right size,” said Boyken — to suit its eclectic needs, mixing lab and computational space. The office side has an open layout with multiple quiet rooms and conference areas named for Bigfoot and other mythical creatures.
The location also puts Outpace near its collaborators at Fred Hutchinson Cancer Research Center and the UW’s Institute for Protein Design.
A window at Outpace looks out onto the Space Needle, in the direction of another life sciences building under construction by Alexandria Real Estate Equities, across the street at 701 Dexter.
Charlotte Schubert is a GeekWire contributing editor with a focus on biotech, healthcare and life sciences. She is a Seattle native and recovering lab rat with a Ph.D. in developmental biology. Follow her on LinkedIn or reach her at firstname.lastname@example.org.