SAN RAFAEL — Novato-based BioMarin Pharmaceutical Inc. (Nasdaq: BMRN) on Friday said it plans to relocate several hundred employees from its Bel Marin Keys headquarters plant to downtown San Rafael by the end of this year.
BioMarin on Friday morning finalized a 10-year lease for 120,383 square feet of office space in two buildings at San Rafael Corporate Center. The company plans to occupy all of currently the vacant 770 Lindaro St. and two floors of of 790 Lindaro.
“We’re growing like crazy, and we’re out of space,” said Mark Wood, vice president of human resources and corporate affairs.
The company has grown from 250 employees in 2004 to more than 1,000 worldwide, including well more than 800 in Novato, its 20,000-square-foot research-and-development satellite office on the Peninsula and its recently acquired production plant in Ireland.
BioMarin is hiring for at least another 100 new positions this year, most of them in Marin but not necessarily connected to the San Rafael expansion, according to spokesman Bob Purcell. About half the Novato workforce lives in the North Bay, and the other half, in San Francisco.
Driving this growth are a number of treatments in various phases of development, U.S. and international clinical testing and production, Mr. Wood said. This year, the company expects to have seven products in clinical trials, the most in BioMarin’s history, according to the company.
Net revenue from products increased 17 percent in BioMarin’s third quarter, the most recent one reported, and 2011 revenue is expected to be $439 million to $465 million.
Research-and-development and some headquarters staff will be relocating from the Novato campus to the San Rafael offices. However, the Novato labs, manufacturing operations and warehousing won’t be, Mr. Wood said.
Leases for about 70,000 square feet of office space at 90 and 105 Digital Drive at the Bel Marin Keys campus expire in 2013. Sometime next year, the company will be deciding what to do with that space, Mr. Wood said.
The company also plans to keep its 40,000 square feet of expansion offices at Wood Hollow Office Center on the west side of Highway 101 in Novato.
Architecture firm HOK’s San Francisco office is designing BioMarin’s San Rafael offices. BioMarin and San Rafael Corporate Center co-owner Seagate Properties will be coordinating tenant-improvement contracts via a list of previous vendors and contractors, Mr. Woods said.
Seagate is preparing for 300 to 400 BioMarin employees to occupy the space, according to President Wick Polite. The anticipated beginning of the move is April 15, pending design and building permits.
San Rafael Mayor Gary Phillips said having so many new employees downtown will have a “tremendous impact” on local businesses.
“It will be great to have a lot of new employees downtown shopping and having meals,” he said.
The maker of treatments for rare diseases has been rapidly expanding production in the past three years. In June, it announced it was buying a 133,000-square-foot Pfizer manufacturing plant in Cork, Ireland, for $48.5 million. The plant acquisition, along with the establishment of an international supply chain and logistics presence in Dublin earlier in the year, are BioMarin’s first production expansions outside the U.S.
In 2010, BioMarin also completed a $60 million renovation at its Novato plant, more than doubling its commercial production capacity at the eight-building campus. Last November, the company said it received the first Food & Drug Administration approval of the plant expansion. It was recently approved for European markets, Mr. Wood said.
The new plant in Ireland and the expansion of the one in Novato gives BioMarin production capacity for several years to come, he said. The two facilities have the capacity for $1.5 billion in revenues, the company said in a publication for its research-and-development open house in December.
To make room for the manufacturing growth in Novato, BioMarin in the past two years has been shifting administrative personnel to tens of thousands of square feet of leased space in a west Novato building.
The BioMarin lease plus new tenant Manifest Marketing, which is set to move into 2,400 square feet of the 781 Lincoln building in 30 days, will take the 318,000 square feet of existing space in four buildings at San Rafael Corporate Center to 85 percent occupancy, according to Mr. Polite. Negotiations in the works could bring the development to 90 percent occupancy in a few months, he added.
The project is approved for a fifth and final office building with 84,000 square feet and an adjoining parking garage, the project’s second, to be built by the end of 2015.
“This certainly accelerates our timeframe from where it was before,” Mr. Polite said. “We need a little more job creation to get a little healthier economy before we move forward.”
BioMarin’s latest lease along with the county of Marin’s purchase of a 328,000-square-foot Marin Commons office building in north San Rafael last month and plans to occupy 180,000 square feet of it in 2013 is expected to bring down the vacancy rate for the 10 million square feet of San Rafael top-class office space to around 17 percent from nearly 40 percent at the beginning of 2011, according to Whitney Strotz, manager of Cassidy Turley BT Commercial’s Marin office.
“With the two deals there has been about 300,000 square feet of class A [office space] positive absorption, and that will significantly change the vacancy rates in the county,” he said.
The countywide class A office vacancy rate is expected to be 14 percent for the fourth quarter of last year, compared with 20 percent at the beginning of the year.
The dwindling supply of class A space will mean fewer options for tenants, and they will have less leverage in discussions with landlords, according to Mr. Strotz.
Historically, the availability of office space tightens in southern Marin, leading to increasingly higher rents, which prompts companies to look north in Marin for less-expensive space, according to Steven Leonard, who represented San Rafael Corporate Center in the BioMarin lease with Trevor Buck. Exceptions to that trend were the recent commercial real estate bubbles related to telecommunications and high-tech companies in the late 1990s and to residential real estate in the first half of the last decade, Mr. Leonard noted.
Mark McGuire of Colliers International in Oakland represented BioMarin in the lease negotiations. Steven Leonard and Trevor Buck of Cassidy Turley BT Commercial represented San Rafael Corporate Center.