A new hub for cancer research
Westside project’s developer finds both a tenant and a buyer in USC Ellison Institute.
A pioneering cancer research center funded by tech mogul Larry Ellison will launch next April in an office complex being built near a light-rail stop in West L.A.
The Lawrence J. Ellison Institute for Transformative Medicine of USC on Exposition Boulevard near Bundy Drive will give USC’s Keck School of Medicine a beachhead in the desirable Westside office market, dominated on the medical side by UCLA and Cedars-Sinai.
The medical school based in Boyle Heights announced two years ago that the co-founder of computer software giant Oracle Corp. was donating $200 million to establish the namesake institute, but it didn’t pinpoint the location — 12414 Exposition Blvd. — until this week.
Finding medical office space on the Westside is usually a challenge, real estate broker John Wadsworth said, because the technology boom has been soaking up most new offices and tech companies can typically pay top dollar.
What’s more, sites near transportation hubs tend to get snapped up by apartment developers who can spend big for land because they can charge premium rents for completed units.
If you’re a speculative medical office building developer competing with a residential developer for a site, “you are going to lose all day long,” said Wadsworth, of Colliers International, who specializes in brokering healthcare-related real estate deals.
However, USC had a lot of
dollars to work with.
Los Angeles developer Luzzatto Co. started erecting the structure there a year ago “on spec,” meaning that it was gambling that it could find tenants for the 79,000square-foot building by the time it was finished.
“We felt it was a pretty safe bet that we would attract a creative tenant,” President Asher Luzzatto said. “We just trusted that intuition.”
Not only did Luzzatto Co. find a tenant, it found a buyer — the Ellison Institute expects to purchase the building after leasing it for two to five years, Luzzatto said. By the time it is completed in the spring, it will have cost about $100 million, he said.
A user that plans to occupy the building it buys, such as the Ellison Institute, is often willing to pay more than speculative investors, said broker Tony Morales of JLL.
As an owner, the institute will be able to avoid paying steep Westside office rents, which average more than $5 a square foot per month.
Indeed, selling the building wasn’t part of the developer’s original plan. Luzzatto said he expected it to be a valuable income-producing asset for many years.
But the Ellison Institute pressed for a sale, and the short-term lease was a compromise.
“In an ideal world, we would own this building forever,” Luzzatto said, but the institute “would not move in with just a lease.”
The cancer research institute was, however, precisely the kind of occupant the developer had hoped for when it started work on the building, which replaces an old warehouse.
“We felt like we were serving some greater good by allowing them to buy it,” Luzzatto said.
The three-story building was designed by HLW International, a New York-based architecture firm. It will be open to the environment with outdoor terraces.
The second level of the two-story garage was even built with a high ceiling so it can be converted to other uses if demand for parking dwindles in the future as more people travel by train, ride-sharing or autonomous vehicles.
Los Angeles architecture firm Rios Clementi Hale Studios will design the interior space for the institute, which has lofty goals.
The institute wants to “change the way we treat cancer,” said Dr. David Agus, its founding director and chief executive.
He plans to bring in experts from other fields not typically associated with oncology to collaborate at the institute. Experts from other disciplines such as physics, biology, math and engineering will jointly study ways to prevent, detect and treat the disease.
“We need new thinkers,” said Agus, who is a professor of medicine and biomedical engineering at the Keck School of Medicine. “We need help from other fields.”
A physicist, for example, might “model disease differently than we have done,” he said.
The building will house interdisciplinary cancer research laboratories focused on scientific discovery and innovation. There also will be a clinic, a think tank and education and wellness programs to help people avoid contracting cancer.
“I want to focus on prevention,” Agus said. “My job is to change you so cancer doesn’t want to happen anymore.”
The institute’s location near the Bundy station on the Expo Line that connects Santa Monica and USC’s main campus at University Park was a big part of its appeal, Agus said. “Students can go back and forth” on the train.
Fighting cancer is a priority for Ellison, whose mother died of cancer while he was in college. Oracle cofounder Robert Miner died of the disease in 1994.
The Ellison Medical Foundation has provided more than $300 million in funding for biomedical research on aging, according to Inside Philanthropy.