The gentle hum of sophisticated laboratory equipment fills the air in BioMed Realty’s latest development in Seattle – Dexter Yard. Touring the newly developed property alongside CEO Tim Schoen, one senses that with each step, the potential of Seattle’s booming life science industry feels more tangible. Nestled in the heart of South Lake Union’s innovation district, Dexter Yard is poised to transform the city’s life science landscape. This 528,000-square-foot campus isn’t just about labs and offices. It’s a testament to BioMed’s belief that breakthroughs happen where collaboration thrives.
“It’s a place for people to go and gather,” said Mike Ruhl, BioMed’s vice president of leasing.
When BioMed first introduced the design concept for this project in early 2018, South Lake Union was already a neighborhood brimming with innovation.
A stone’s throw away is Amazon’s sprawling urban campus. Next door is the Allen Institute, which conducts large-scale science research studying the brain, cells, and immune system. Google is across the street from there. Apple’s new urban setting at 333 Dexter is just down the street. Meta occupies a large swath of office space just north of the project, and the Gates Foundation is just to its back, while another cluster of life science buildings is a short walk in Lake Union’s Eastlake neighborhood.
“What you’re going to see probably over the next five to 10 years, right here, in just literally half-block radius, including our 500,000 square feet, there will be two million square feet of life science,” Ruhl said as he described the neighborhood pointing at parcels and buildings from Dexter Yard’s rooftop terrace. “It’s going to be its own neighborhood, but it’s also going to be another hub focused on research.”
But Dexter Yard and BioMed do not want to be just another lab building with a pretty view of the lake. The property was envisioned as a 528,000-square-foot open-block campus that encompasses labs, offices, recreation, retail, and dining spaces. At Dexter Yard, BioMed understands that exceptional commercial real estate means more than just buildings – it’s about fostering a vibrant community. That’s why its pedestrian walkway connects the South Lake Union and Dexter Avenue neighborhoods, inviting tenants and the broader community to its cornerstone feature: the Fieldhouse. This versatile 5,500-square-foot space offers a blend of entertainment and learning potential. It has a flexible configuration and recreational flooring so that it can become a venue for sporting events one evening and company gatherings the next.
The property also features a vibrant new beer hall, SLU BRU, a partnership with Gourmondo Co. It opened its doors in March 2024, making this lively spot a place for the community to unwind on the patio, savor local brews, and indulge in delicious eats.
“It’s a great opportunity to leverage its proximity to the through block, the Fieldhouse, where in the nicer weather days, these doors roll out open, so you have activities here, sports in the Fieldhouse, you can have a team building event,” said John Moshy, BioMed’s vice president of development. “The whole idea was how to create a private public place.”
Making the decision a no-brainer for any real estate executive was perhaps the primary motivator behind the details of the project. “It’s a space that is very unique in Seattle. You don’t see 22-foot ceilings that are purposely built for the tenants,” added Ruhl. This tenant perspective was also the impetus behind the spec office suites built on-site for its lab tenants.
“We’re developing 550,000 square feet of this move-in ready space across the entire portfolio,” said Tim Schoen, BioMed’s CEO. “In addition to here at Dexter Yard, we’re also building this type of spec suites in the Bay Area, San Diego, Boston, and Boulder, Colorado. This type of product and this type built in a 17 million square foot portfolio, we’ve got 550,000 square feet of this stuff on the shelf.”
This allows BioMed to offer tenants space to incubate in a proverbial garden where life science companies will grow. It’s part of BioMed’s offering called Velocity Labs, which is featured in many of BioMed’s Class A properties like Dexter Yard. The concept provides move-in-ready lab spaces designed for biotech innovators that are immediate and scalable without the expense of hiring an architect and contractors to fit out its space. Over the past decade, BioMed estimates that it leased over 500,000 square feet of these specialized labs across the US and UK.
In other words, Dexter Yard is ready for any type of research that innovative scientists can throw at it. And work is already getting done there. The property is roughly half occupied by Allen Institute, Shape Therapeutics, Parse Biosciences, Outpace Bio, and Monod Bio. More may be on the way, and BioMed would like to announce soon other companies joining this roster of researchers.
“It’s been a lot slower year, and a lot of supply coming,” Schoen said, describing the industry in 2023. The activity was especially slower because tenant demand was pulled forward in 2020 and 2021. Companies retrenched as rapid growth in the industry was taking up lab space supply in the early COVID-19 days, but now they need to grow into the space they took at that time.
However, proximity to research and academic institutions continues to be one of the most important aspects of any life science development. “We’re in these environments where you’re closer to the research institutions,” Schoen added.
Yet, the company sees signs of optimism across the industry at the beginning of this year. It has been a very good R&D funding environment, said Schoen, describing R&D budgets increasing over the last two years. The start of 2024 has been positive, and companies are starting to raise money again. During 2023, a lot of them were concerned about the impact interest rates would have on valuations and their ability to raise funds, so they paused making decisions about space. However, money is starting to flow, and that will waterfall to lab demand, as well. “It will take probably six to 12 months, depending on the market, for that to translate into tenant demand,” added Schoen.
“Last year was the slowest year in terms of demand,” added Ruhl. “The beginning of this year saw a change in attitude. We have more tours, [and] we’ll hopefully effectuate our first lease for early 2024. We have a variety of product to offer right now, which we really haven’t had before.”
This variety will certainly help, because it is never certain where the demand will originate and how much will be needed immediately. Ruhl sees vacancy in the Seattle market in the range of 8 – 9 percent, with sublease space and some new supply bringing that figure close to 14 percent. “6 percent of sublease is really hard to transact,” he commented.
The type of life science that defines Seattle is primarily in immunotherapy, which is researched at Fred Hutch Cancer Center, University of Washington, and Seattle Children’s Hospital, the three drivers that make up the biggest chunk of the life science market in this region.
In the past, innovation would originate here and find its way somewhere else, but that may be changing now. “This market, in the 12 years that I’ve been through it, has always been grow-and-be-gone,” said Ruhl. “Now we’re getting to the point where there is momentum and some stickiness.”
BioMed has seen more people come to this region from other biotech centers around the country. “I think we have a great foundation that’s going to start to push forward in a more meaningful way. We went from three million square feet to six million square feet in the course of 10 years,” said Ruhl. Half of that growth was institutional, from places like Fred Hutch and UW, while the other half was from privately funded research enterprises. BioMed sees the intertwined growth of these sectors as mutually beneficial, creating a strong foundation for the region’s progress.
Tim Schoen’s presence in Seattle reflected the region’s growing significance in the company’s strategy. “We now have inventory in each of these markets to help these ecosystems,” said Schoen. “In particular, places like Seattle are definitely growing and becoming a stronger ecosystem. Maybe they will not catch up with San Francisco, but over time, they could get to where San Diego is.”
Schoen would know. That is his hometown!
