PhillyInc: Merger of real estate firms tied to life sciences may give West Philadelphia area a boost

An architect's rendering of the new Science Center tower at 3737 Market St.
An architect's rendering of the new Science Center tower at 3737 Market St.
Posted: April 09, 2013

For 50 years, the University City Science Center has been where scientists and start-ups have toiled to build the next generation of Philadelphia-area companies.

But to hear science center president and CEO Stephen S. Tang, what would really help nurture that entrepreneurial soup would be if a big life-sciences company were to put its headquarters or research operations in West Philadelphia.

Given that several of the biggest drug companies locally have already made long-term commitments elsewhere, there is nothing on the horizon presently. But a merger between two real estate firms that focus on life-sciences properties may aid Tang's quest.

Late last month, BioMed Realty Trust Inc. said it would acquire Wexford Science & Technology L.L.C. in a $640 million transaction.

What BioMed is buying is 1.6 million square feet of space in research facilities near universities, medical systems, and research institutes in Philadelphia, Baltimore, Chicago, Miami, St. Louis, and Winston-Salem. Two of those properties are on the 17 acres the science center controls in West Philadelphia.

The largest tenants nationally for Wexford's space, based on annualized rents, are the University of Pennsylvania Health System, Washington University in St. Louis, Wake Forest University, and other colleges.

In contrast, BioMed's largest tenants include GlaxoSmithKline P.L.C., Vertex Pharmaceuticals Inc., and Regeneron Pharmaceuticals Inc. BioMed agreed last week to construct two buildings in Tarrytown, N.Y., where Regeneron employs more than 1,300 people, to house expanded research-and-development operations.

As Tang views the combination, Wexford brings its skills in creating space for academic and medical research organizations, and BioMed has strengths as landlord to Big Pharma. And Tang has a block-long property on the southwest corner of 38th and Market Streets that he'd like to fill with 800,000 square feet of space for an established life-sciences company.

The reason? Tang said having the presence of a Big Pharma or large medical-device maker would bring the kind of jobs and activity that have helped other urban tech parks grow in Cambridge, Mass.; San Francisco's Mission Bay; and Research Triangle Park in Raleigh-Durham, N.C.

The BioMed/Wexford deal includes three properties currently under development, including an 11-story patient-care building at 3737 Market St. that Wexford began work on last September. Penn Presbyterian Medical Center is expected to occupy 155,700 square feet of that 272,700-square-foot building.

Wexford, of Baltimore, has been working with the science center since 2006 to develop five new buildings on Market Street. The first was an eight-story building at 3711 Market that opened in June 2008 and contains parking and research space.

Not included in the BioMed deal is a project announced in January by the science center: A joint venture between Wexford's parent company and Southern Land Co. would begin work on a 364-unit apartment building at 3601 Market St. in the fall. That would be the first residential property built at the science center.


Contact Mike Armstrong

at 215-854-2980, marmstrong@phillynews.com, or follow @PhillyInc on Twitter. Read his blog, "PhillyInc," at www.phillyinc.biz.

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