CA Ventures Bags 14-Story Biotech Tower in Emeryville

A plan by CA Ventures to build a 350,000-square-foot life science tower in Emeryville has fizzled.

The Chicago-based developer withdrew its proposal to build the 14-story highrise at 5850 Shellmound Way, the San Francisco Business Times reported. It was to have replaced 60,000 square feet of offices.

The life science building proposed in 2021 was to include 30 affordable apartments. CA Ventures, which had partnered with land owner Shellmound Christie on the project, declined to say why it killed the project.

It may be that the company, like other developers in the Bay Area, is cautious about a cooling life science sector. Or it may be that it didn’t like having to build affordable homes.

Available labs and life science offices along northern I-880, which includes Emeryville, jumped to 12.3 percent in the first quarter, up from 6.6 percent over the same period last year, according to CBRE.

A hot life science market that fueled the development of spec labs has chilled with the rising costs of construction and supply chain challenges.

In October, Pasadena-based Alexandria Real Estate Equities walked away from a nearly 600,000 square foot life science campus approved in South San Francisco. During an earnings call last quarter, one executive described the firm as “pretty darn cautious.”

Peter Moglia, its CEO, said Alexandria had made a strategic decision to cut 2023 construction spending by some $250 million.

For CA Ventures and the city of Emeryville, the Shellmound project was supposed to be a win-win.

In 2018, Shellmound Christie had proposed a 244-unit apartment complex for the 1.5-acre site, before concluding the project wouldn’t pencil out.

Then came the life science deal. CA had initially proposed including six homes alongside the life science tower before Emeryville negotiated the number up to 30.

City leadership saw the project as a testing ground for mixing life science and housing in one project.

It was a combination Mayor John Bauters had told the Business Times would become increasingly crucial as residential developers began moving away from housing in favor of life science offices and labs, which were commanding higher rents.

Other life sciences projects are moving forward in the East Bay city. In December, Oakland-based Harvest Properties received a go-ahead to build a 210,000-square-foot R&D building at 6425-6475 Christie Avenue.

Last year, Emeryville was among the nation’s fastest-growing life science clusters, with more than 150 biotech companies, including Novartis, Bayer Healthcare, Amyris and Zymergen, according to Globest.com.

— Dana Bartholomew