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March 20, 2015

Juno Therapeutics shopping for new headquarters in Seattle

Puget Sound Business Journal

Marc Stiles and Annie Zak

Seattle biotech Juno Therapeutics has grown so much in the last year that it's going to have to move.

The company announced this week that it's looking for a new headquarters. Juno grew from 10 employees at the beginning of 2014 to 123 employees now.

Currently, Juno operates in a South Lake Union building at 307 Westlake Ave. N., where the company occupies 23,200 square feet of office and lab space. That building, which is also occupied by Seattle BioMed, recently sold for a record price.

The new headquarters will also be located in Seattle.

This is just the latest big move by the company to establish itself as a big presence in Seattle's biotech scene after a hugely successful initial public offering in December. Juno, which makes immunotherapy treatments for cancer, also recently signed a lease for a manufacturing facility in Bothell.
A spokesman for the company said Juno is seeking a new headquarters that will accommodate growth for both office and lab space. He would not comment on how many square feet the company is looking for.

CEO Hans Bishop said in the company's first-ever earnings call on Wednesday that Juno (Nasdaq: JUNO) will continue to grow this year.

Bill Neil, a commercial real estate broker who specializes in leasing lab and office space for life science companies, thinks Juno will have to be patient.

He works for Kidder Mathews in the Seattle region, and the company's year-end 2014 report states that the vacancy rate for unoccupied lab or existing lab-ready space in Seattle is "virtually zero." Another real estate company, JLL (NYSE: JLL) reports that the amount of vacant lab space around Lake Union, where Juno currently operates, is about 2 percent.

Neil said any company looking for 50,000 square feet of space is going to have to wait for something to be built, and developers of lab projects are not building on a speculative basis anymore.
A big reason is how much it costs to build labs. Lab space is two-and-a-half times more expensive to build than traditional office space. So the new space has to be pre-leased "otherwise [real estate development companies'] shareholders would revolt," Neil said.

"It's a predicament now," he said. Growing companies "will have to plan well in advance for their expansion needs."

There is one project under construction in South Lake Union, and some space was leased before construction started last summer. BioMed Realty Trust (NYSE: BMR) is building a seven-story project at 500 Fairview Ave. N. and NanoString Technologies Inc. (Nasdaq: NSTG) has leased part of the project.

What about Amgen's soon-to-be-empty Helix campus? Economically, it likely won't make sense for Juno to take a slice of the sprawling, 750,000-square-foot campus in Seattle's Interbay neighborhood, Neil said, so it's unlikely Juno would move to the campus.

Expedia may be looking at that same space to house its 3,000 Puget Sound-area employees.

For the full story, go to Puget Sound Business Journal.

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