A new hub for cancer re­search

Westside project’s de­vel­oper finds both a ten­ant and a buyer in USC El­li­son In­sti­tute.

Los Angeles Times - - BUSINESS - By Roger Vin­cent

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.

HLW In­ter­na­tional

LUZZATTO CO. is de­vel­op­ing this of­fice building un­der con­struc­tion near an Expo Line stop in West L.A. When it wraps up next year, a pi­o­neer­ing cancer cen­ter funded by tech mogul Larry El­li­son will move in.

HLW In­ter­na­tional

THE BUILDING’S location near the Expo Line con­nect­ing USC’s main cam­pus and Santa Mon­ica was a big part of its ap­peal to the cancer in­sti­tute, its CEO said.

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