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Thursday, Feb 29, 2024

Amgen in Talks to Sell Buildings After Layoffs

Some big changes are coming to the Amgen Inc. headquarters in Thousand Oaks – in the form of outside companies taking space on the sprawling campus. The biotech giant announced late last month that it would lay off up to 2,900 workers, or nearly 15 percent of its global workforce, and has decided to consolidate on the campus. That will involve selling off an undisclosed number of buildings on the periphery of the campus, and already there are companies interested in the property, which will become available as the layoffs are carried out this year and next. “We are actively engaging in discussions with third-parties about potential future use of the facilities,” said company spokeswoman Kristen Davis in an email. The company’s well-landscaped campus stretches over 120 acres and consists of 40 buildings totaling about 3.7 million square feet. In addition, there are premium amenities, including large outdoor meeting spaces, gardens, a full fitness center and a regulation-sized soccer field. Ahmed Enany, chief executive of the Southern California Biomedical Council trade group in Los Angeles, said a smaller firm could benefit from being near Amgen. “There are positive theoretical synergies from being close to Amgen,” he said. “It really depends on the type of space they end up putting on the market. If a space is full of adequate wet labs and I’m a startup, yeah I would be there. I may benefit from some of the Amgen layoffs in hiring.” There are some indications the space could be industrial or labs, since as part of its layoffs announcement the company said it would be expanding in Cambridge, Mass., where it has a research site, and in South San Francisco, where it spent $10.4 billion last year to buy Onyx Pharmaceuticals, the developer of a promising cancer drug. What’s more, the demand for flex or industrial space is high in the Conejo Valley, which had an extremely low 1.3 percent vacancy rate in the second quarter, according to the L.A. office of Colliers International. Also, industrial rents were high with average asking rates in the submarket at 72 cents a square foot. By comparison, the area’s office market has been doing poorly, rising seven tenths of a point to 18.3 percent in the second quarter. Ground zero Lee Black, executive managing director at the Woodland Hills office of Cassidy Turley, said companies looking for high-quality space certainly would be attracted to Amgen’s campus. “They had absolutely everything done first class there. If a business wants to be in that market, it’s ground zero for great amenities and a great environment,” he said. “But it’s subject to compatible use.” Indeed, it would seem a bit off-kilter if a financial institution or furniture manufacturing company moved onto the campus, which features some of the most highly advanced technical facilities in the region. Greg Cauchon, a former Amgen scientist, runs the Ventura BioCenter in Thousand Oaks, the Conejo Valley’s first biotech incubator, which he opened in February last year. Cauchon’s client list includes companies in myriad fields, including a biopharmaceutical startup and a firm working on the development of health-care diagnostic equipment. He said it would be very unlikely for any startups, such as the ones he may house, to look at whatever space becomes available at Amgen’s headquarters. “For small companies, it may not even be worth the trouble. They may get lost in the shuffle. What Amgen is probably looking for are larger companies that could come in and take a whole building or floor,” he said. Black said he has little doubt that any space in the peripherals of the campus would be taken. “Everyone has always had in the back of their mind that something could happen with Amgen. They could close up a few buildings and the market would absorb it,” he said. Cauchon also sees some upside from the layoffs. “Presumably, more scientists may also become available in the area to work with startups or even start new businesses themselves,” he said. “We hope that’ll happen and we’d be happy to help.” Enany from the Biomedical Council takes it a step further. He said Amgen shouldn’t be so “bureaucratic,” and should instead use the consolidation as a chance to help create an incubator of its own. “If I were Amgen and thinking creatively and outside of the box, I would use the excess capacity and create an entrepreneurship center,” he said. “Instead of laying scientists off and sending them away, help them start new companies that can then collaborate.”

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