In this week's issue, German pharma giant Merck has topped off its $65 million research facility in Billerica, MA; Irvine, CA-based Sares Regis breaks ground on a rare industrial project on California's Central Coast; and a group of architects plans to develop an office condo project in Culver City, CA, on the Westside of Los Angeles. Also, the Block 21 mixed-use project in Austin, TX, slated to become the new home of the "Austin City Limits" music broadcast, has received a new construction loan to replace the loan from fallen lender Corus Bank; network firm GXS has leased more than 83,000 square feet at The Summit at Washingtonian, under construction in Gaithersburg, MD, and Best Western has opened one of its new Atrea concept hotels in Denton, TX. This, plus more development news and land sales from around the U.S.

---

CoStar Group's In The Pipeline is a column on significant land sales, transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new project -- and sign up to be added to our distribution list to receive future In the Pipeline columns by e-mail.

Read previous columns and articles.

---

Merck Affiliate Tops Off Massachusetts Research Facility

EMD Serono, Inc., an affiliate of Merck KgaA of Germany, has topped off its $65 million research facility in Billerica, MA.

Construction of the 140,000-square-foot Billerica facility, announced in 2008, is expected to be complete in late 2010. The new facility will accommodate about 200 scientists with expertise in cancer biology, cancer immunotherapy, oncogene signaling, medicinal chemistry, molecular modeling, protein engineering, therapeutic antibodies and manufacturing cell lines across the core therapeutic areas of neurodegenerative diseases, cancer and fertility.

The expansion in Billerica will bring the discovery scientists closer to about 50 colleagues in technical operations who specialize in process development and protein production for early clinical trials. This collaboration will play a critical role in creating an innovative and collaborative campus environment for drug discovery and development.

The construction of the Billerica facility will result in approximately 200 to 300 jobs, and more than 100 new, permanent research jobs in Massachusetts. EMD Serono is currently working for LEED certification.

Once complete, the new research facility will accommodate over 115,000 square feet of lab and office space, including 25,000 square feet of chemistry and screening labs; 25,000 sf of biology and cell culture labs; 22,000 sf of general lab support space; 20,000 sf of office and conference rooms and 23,000 sf of mechanical space. In addition, 25,000 sf will be the central node space, which will consist of the reception area, cafeteria/auditorium, fitness center and offices and conference rooms.

The Billerica facility is part of Merck Serono's research hub in the United States, one of the three main research hubs within Merck Serono, together with the research hubs located in Germany and Switzerland.

The Billerica facility is focused on the therapeutic areas of fertility, oncology and neurodegenerative diseases. Jones Lang LaSalle is managing construction. Ellenzweig is the architect of the facility.

Sares Regis Breaks Ground on Business Park in Goleta, CA

Sares Regis Group has broken ground on the development of six buildings in the first phase of the planned 96-acre Cabrillo Business Park in Goleta, CA.

The 14-acre phase includes three office buildings, two retail buildings and a self-storage facility. The office buildings will total 175,000 square feet. The retail development will total 17,500 square feet and the self-storage facility will total 72,000 square feet.

"Demand for high-quality commercial facilities is greater in this market than anywhere in California because virtually nothing has been built here in the last 10 years," Steve Fedde, senior vice president for the Ventura Region of Irvine-based Sares Regis, said of the Goleta market, located about 10 miles northwest of Santa Barbara. Kristen Amyx, president and chief executive officer of the Goleta Valley Chamber of Commerce, said only one other office building had been developed in Goleta in recent memory.

Mark Mattingly and Greg Bartholomew of Pacifica Commercial Realty's Santa Barbara office are marketing the project at Hollister Avenue and Los Carneros Road. The nearby University of California at Santa Barbara in Goleta, which generates a steady stream of new technological and scientific companies in the area, is responsible for creating much of the high demand for commercial facilities, Mattingly said.

The master plan calls for development of 956,000 square feet of R&D facilities near Santa Barbara Municipal Airport. Cabrillo Business Park is planned for 12 one- and two-story flex buildings up to 80,000 square feet. Forty-six percent of the site will remain as natural or landscaped open space. It will include 19 acres of restored and expanded wetlands and grasslands with publicly accessible trails.

Architects to Develop Office Condos in Culver City, CA

Cuningham Group Architecture, P.A. principals are co-developing their own green office condominium building in Culver City, CA.

Cuningham (CGA) and its partner REthink Development have received approvals from Culver City to develop its new Southern California headquarters as part of a 63,000-square-foot building in the city's Hayden Tract district.

The architecture firm will occupy about 10,000 square feet of the structure and sell remaining space to other firms as office condos. The Hayden building will offer four stories of office space and two levels of underground parking. The project is projected to break ground in 2011 and open in late 2012.

The fact that the principals of the firm are investing their own money significantly in the project is a sign that "design industry leaders can commit to high-performance design not only as a design or moral exercise, but also as an investment strategy," says CGA Principal Jonathan V. Watts.

It remains unusual in L.A. for an architecture firm to tackle property acquisition, approvals, financing, liability protection and other development issues, CGA principals said. However, both REthink Development and CGA have a strong track record in green design and sustainable development. The team believes its timing may be right for the inevitable real estate rebound.

"We believe we are ahead of the curve in anticipating a demand for green for-sale office space as the economy improves," Watts said.

Cuningham Group has more than 160 employees in offices in Minneapolis, Los Angeles, Las Vegas, Biloxi, Bakersfield, Madrid, Spain and Seoul, South Korea.

GXS Finds New HQ Space in Gaithersburg

Global Exchange Services, a business-to-business e-commerce network firm, leased 83,737 square feet at The Summit at Washingtonian building in Gaithersburg, MD. Occupancy is scheduled for April of next year.

GXS will relocate its headquarters from 100 Edison Park Drive, a six-story, 341,692-square-foot office building in Gaithersburg owned by Santa Fe Hotel Inc. In a deal signed in July, Montgomery County's police and fire headquarters will take over the GXS space and fully occupy the property.

Washington Property Co. owns The Summit, an eight-story, 193,199-square-foot office building at 9711 Washingtonian Blvd. that is part of a 7.4-acre office development site. WPC purchased the site in summer 2007 and broke ground on The Summit, the first of a two-building project, in February of last year. The Wisnewski Blair & Associates-designed building delivered this year. GXS will occupy parts of the fifth floor and all of floors six through eight.

Art Greenberg, Paul Schweitzer and Adam Shindler of Studley Inc. represented the tenant. Marc Witowski was the in-house representative for the owner. (By Laurie Forbes)

Austin Mixed-Use Project Gets New $120M Construction Loan

The Dallas office of HFF Inc. has arranged a $120 million recapitalization for the W Hotel & Residences, a mixed-use hotel project under construction in Austin, TX that will be the new home for the "Austin City Limits" music program

Austin-based Stratus Properties Inc. and the Canyon Johnson Urban Funds closed a $120 million replacement construction loan for the Block 21 project, which includes the new W Austin Hotel & Residences. Bea Bank Nevada funded t he loan and it was originated by Beal's wholly owned lending subsidiary, CLG Hedge Fund LLC. The development team secured the financing with Beal Bank after the original lender, Corus Bank, N.A., was unable to fund the loan.

The project is currently at the 25th floor out of the 37 total floors and is set to open in December of next year. The project is in downtown Austin at the Second Street district overlooking Lady Bird Lake. It will feature 159 luxury residential units, 252 hotel guestrooms and suites, 18,000 square feet of retail and restaurants, 37,000 square feet of office space and a street level plaza.

The W Austin Residencies will be on floors 18-37 with clear views of Lady Bird Lake, The Hill Country, University of Texas Tower, State Capitol Building and the downtown skyline. (By Samantha Mrozinski)

Barnhart Delivers $19M High School Facility in Tustin, CA

Construction manager Barnhart-Heery has completed a $19-million science center at Foothill High School in the Orange County, CA community of Tustin.

The 48,000-square-foot Center comprises two 2-story buildings housing 14 classrooms, which include 10 labs for biology, chemistry and physics and four classrooms for earth sciences and physical sciences.

A two-story glass-block stairway enclosure and a system of covered walkways connect the buildings, which also provide teachers with offices, a lounge and four specially designed prep rooms. Energy-efficient features include fabricated-steel solar reflectors beneath windows to reflect incoming light from the north and fabricated-steel shading devices above the south-facing windows.

The science center was funded by the $80-million bond Measure G passed by voters in 2002 to repair and renovate the 20 oldest schools in the Tustin Unified School District.

NTD Architecture provided design services. The team for San Diego-based Barnhart included John Bernardy, senior vice president; and John Squillace Sr., senior project manager.

Best Western Opens Atrea Hotel in Denton, TX

Best Western has opened its fourth Best Western Atrea, an upper midscale prototype hotel designed to attract business travelers, in Denton, TX.

The 74-room Best Western Atrea Crown Chase Inn and Suites is among the first of this new concept for the 63-year-old Best Western brand. The hotel is located along the I-35 East corridor and about a mile from downtown Denton,.

It offers a cocktail lounge, media center, around-the-clock business center, fitness room and sundry. The facility includes more than 1,800 square feet of meeting space with the largest room accommodating about 100 people.

In addition to the Crown Chase Inn and Suites, Charles Helm and his business partner and wife, Sharon, own and operate five other lodging facilities in Texas, including three other Best Western facilities; Best Western Christopher Inn and Suites in Forney; Best Western Monica Royale Inn and Suites in Greenville and Best Western Crown Colony Inn and Suites in Lufkin. The couple’s other properties are the Holiday Inn Express and Suites in Greenville and Holiday Inn and Suites in McKinney.

More New Development and Land Transactions

Land Sold in Richmond, VA

The Common Wealth Foundation for Cancer Research sold 3.4 acres on Maryland Court at the Deep Run Business Center in Richmond, VA, to Riverstone Properties LLC for $1.44 million, or about $423,529 per acre.

Originally, this property was given as a gift deed to the cancer foundation in 2004 in the hopes the profits it would make from the property being built up would help fund the nonprofit. Due to economic hardships, the foundation needed to sell the property. RJS & Associates and Riverstone Properties were the original owners that gave the property to the nonprofit. They plan to hold onto the property until economic times improve and would like to sell to a developer and have a hotel put on one parcel and a credit union on the other.

Robert Singley with RJS represents the buying group in marketing the property. (By Jill Schisler, CoStar COMPS #1800694)

Investors Plan 180-Unit Multifamily in Belltown, WA

Jon Breiner and Edward Hewson of Paragon Real Estate Advisors acquired the commercial lot at 2625 Third Ave. in Seattle, WA, from the American Lung Association in Washington for $3.35 million.

The 12,960-square-foot lot currently houses the 8,530-square-foot office of the American Lung Association of Washington and will for the next three years. After the lease expires, the buyers plan to develop a 12-story multifamily building on the property, featuring 180 units.

Tom Craig of TSC Real Estate Inc. represented the seller. Jeremy Moller with JSH Properties represented the buyer. (By Kerry Post, CoStar COMPS #1808308)

Westinghouse Begins New Building in Cranberry Woods, PA

Westinghouse Electric Co. has began construction on its fourth building in Cranberry Woods Township north of Pittsburgh, PA. The 122,100-square-foot property should be completed by fall of 2010, with a long-term lease to Westinghouse. The new three-floor facility will be across from the initial three buildings on the 83-acre business campus. Building IV is expected to bring an additional 800+ jobs to the area.

In addition to the new construction, Westinghouse also leased 183,000 square feet at 4000 & 5000 Marconi/Ericsson Drive in Warrendale.

Dan Adamski and Drew Saunders of Jones Lang LaSalle represented Westinghouse in these transactions. Ferchill in Cleveland is the owner/developer. (By Jovon Mcdougal)