Graymark Capital has quietly pulled off a bargain in Emeryville, scooping up a life science building once pitched as the heart of a massive biotech campus for $26.9 million. The deal, announced yesterday, for the Atrium Labs property at 1650 65th Street, comes in at roughly half of what the site commanded at the market peak and underlines how quickly demand for big R&D boxes in the East Bay has cooled. For Emeryville, the sale effectively closes a headline project from the city’s recent development boom.
Longfellow Real Estate had earlier secured a long-term ground lease to turn the concrete warehouse into lab space and branded the project as Atrium Labs. According to Newmark, the building was already set up for conversion, with heavy power, high clear heights and roughly 127,818 square feet of rentable space. Commercial listings marketed the property to R&D tenants, and the leasing specs are still posted on LoopNet.
Market Glut Left the Project in Limbo
The grand plan started at around 750,000 square feet but kept shrinking as tenant appetite cooled and financing grew harder to secure, eventually landing at about 125,000 square feet. Industry coverage described owners quietly re-shopping the now-empty building after a wave of new lab projects hit the Bay Area and vacancies spiked. The Registry detailed both the oversupply and the decision to bring the property back to market.
Why the Price Plunged
The markdown was hard to miss. An entity tied to Graymark Capital paid $26.9 million, about $209 per square foot, for the building, roughly half of the roughly $51 million PSAI Realty spent on the asset in 2019. As reported by The Real Deal, PSAI terminated its ground lease with Longfellow in 2024 after alleging the developer had fallen behind on more than $1 million in rent, a dispute that helped clear the way for a clean sale. The outcome is a pointed reminder that large-scale lab conversions that once attracted sky-high pricing now come with more risk and fewer bidders.
What Graymark May Do Next
The purchase gives Graymark a foothold in Emeryville and an R&D ready shell in a submarket known for power capacity and generous ceiling heights. According to the company’s own materials, Graymark has already been busy across Northern California, including Fremont, Sunnyvale, Palo Alto and San Francisco, often buying properties it can reposition into modern industrial or lab space. For local planners and owners, the latest deal hints at a new phase in which opportunistic buyers hunt for discounts while redevelopment slows and remains more cautious in the face of stubbornly high vacancy.
