ProteinSimple, the Santa Clara-based protein analysis company that filed to go public last week, will move its 200 employees to North San Jose, where it will have plenty of room to grow.
ProteinSimple just leased 3001 Orchard Parkway, the roughly 100,000-square-foot former Fairchild Semiconductor building that Ridge Capital Investors and Contrarian Capital Management bought last year. It’s a big space jump for ProteinSimple, which currently occupies about 45,000 square feet of lab, office and manufacturing space in two buildings in Santa Clara.
The deal is an example of two trends — both of which are good for landlords. It’s more evidence that the real estate market will continue to benefit from the region’s IPO pipeline as companies gear up for the hiring binges that come with going public. And it’s additional affirmation that investors’ bets on rehabbing tired old Silicon Valley buildings may have been well played.
ProteinSimple — winner of The Business Journal’s 2012 Idea and Innovation Award— describes its business as “simply to help researchers gain a better understanding of proteins and their role in disease,”according to its website. The company, founded in 2001 as CellBiosciences, has developed a variety of technologies for protein analysis. These include a replacement for the traditional Western blot assay used to identify pathologies in tissue samples. The product results in faster tests and results.
ProteinSimple, whose Nasdaq ticker will be PRTN, said it could raise up to $86.25 million in the offering. The company earned about $1 million on revenue of $51 million in 2013.
Tim Harkness, ProteinSimple’s president and CEO, declined to comment on Friday because his company has entered a mandated “quiet period” before going public.
According to the company’s filing statement, ProteinSimple will pay a starting rent of $1.82 per square foot each month, or $178,282 per month. The nine-year lease starts in September.
This is the second lease of a full building on San Jose’s “Renovation Row” in recent weeks. Late last month, I wrote about Vander-Bend Manufacturing leasing a 200,000-square-foot industrial building at 2701 Orchard Parkway.
Orchard Parkway is Ground Zero for the trend of investors rehabbing older, outdated buildings, pumping money into refreshing them and attempting to attract tenants at higher lease rates. Ridge Capital and its partner, Contrarian, bought the former Fairchild building for about $13.5 million, then pumped several million dollars into improving it. Sources say there are a couple more of these types of deals in the works.
JLL’s Conor Flannery, who represented the tenant (and was also involved in the Vander-Bend transaction), declined to comment on the ProteinSimple deal specifically. But he said the recent leases, and additional activity in the neighborhood, could be the start of a trend. So far, rehab-space landlords have been competing fiercely with each other, and as more projects get absorbed, that could change the market fundamentals.
“The one benefit for the landlords competing is that now that one of these is off the market, at some point they’re going to feel more bullish on the remaining product because there’s less competition,” he said.
“It’s just more vibrancy for the street,” he said. “With the remaining property, someone will see these two new companies that are going in, as opposed to it being a ghost town.”