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April 10, 2015

Amgen takes a hit on sale to Expedia

Puget Sound Business Journal

Jacob Demmitt

As it turns out, everything that once made Amgen's Helix campus a dream facility for scientists wasn't worth a whole lot when Expedia bought the site on Seattle's waterfront for its new headquarters.

The science equipment will be the first to go, followed closely by the lab space itself - which is expensive to build and in short supply in Seattle.

By the time Bellevue-based Expedia ignored all the stuff it wouldn't need when it moves into the building in 2018, the campus Amgen (Nasdaq: AMGN) once paid $625 million to build sold for just $228.9 million.

The property probably would have fetched a higher price from a company actually looking to keep the lab space, but there simply wasn't that kind of buyer in the market.

An Amgen spokeswoman said the company took bids on the property. "Several entities responded," she said, and Expedia ended up the winner.

"Certainly they hoped and the whole life science community hoped that it would've been continued in laboratory research and development mode," said Bill Neil, a Kidder Mathews commercial real estate broker who specializes in leasing lab and office space for life sciences companies.

"But it was just too big a project. Even if you take someone who needs 250,000 square feet - of which there aren't any in Seattle - it's still only one-third of the size of the campus."

The property has 750,000 square feet of space, spread across six buildings on a 40-acre lot. Had the campus been smaller, several local biotech companies might have been lining up to claim the valuable lab space.

But now those labs will be torn out as the one-of-a-kind research facility becomes the headquarters for Expedia (Nasdaq: EXPE), which plans to grow its local employee count to 4,500, up from about 3,000 now.

>The campus will have to undergo "pretty significant renovation" to get ready for Expedia, company officials said. The remodeling is expected to take more than a year.

Amgen says it will pull out some of the equipment Expedia doesn't need before it vacates the campus at the end of this year.

Some of it will be shipped to other Amgen locations, some auctioned off and the rest donated.

That will help offset some of the losses the company saw from the sale. But unless there's $400 million worth of microscopes lying around in there, Amgen is going to take quite a hit.

But that probably wasn't much of a surprise when the company - which is based in Thousand Oaks, Calif. - decided to shut down all its Washington operations last year.

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

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