11119 N. Torrey Pines Highway. Picture courtesy of DivcoWest
DivcoWest has expanded its San Diego and life science portfolio with the acquisition of 11119 N. Torrey Pines Highway, a 72,506-square-foot Class A laboratory constructing within the Torrey Pines analysis cluster, for $86 million from Alexandria Actual Property Equities Inc.
Alexandria acquired the 4.4-acre property in 2007 for $42.6 million and redeveloped the standalone constructing. The constructing is leased by the California Institute of Biomedical Analysis, a division of Scripps Analysis. Calibr has occupied the asset since 2012 and focuses on drug discovery and improvement for a variety of human ailments, together with most cancers.
Gregg Walker, president of DivcoWest Actual Property Asset Administration, mentioned in a ready assertion the acquisition offered a uncommon alternative to amass a purpose-built lab in Torrey Pines under alternative prices and secured by credit score tenancy. Walker mentioned Torrey Pines is a strong-performing and extremely sought-after submarket with long-term upside as a result of pure provide constraints.
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Torrey Pines is constantly considered as one of many prime life science submarkets within the nation and has the very best common asking rents and lowest direct emptiness in San Diego. The acquisition is the primary made by a personal actual property investor since 2000 and is one in all solely three analysis properties available in the market not owned by a public REIT, nonprofit or proprietor/consumer. The property was marketed to a restricted group of certified consumers by Eastdil Secured.
The LEED Gold-certified lab constructing was in-built 1990 and utterly renovated in 2012. The constructing has on-site showers and lockers rooms in addition to convention rooms and a health heart. It’s located throughout from the coastal cliffs overlooking the Pacific Ocean and the Torrey Pines Golf Course, which has hosted the U.S. Open in addition to different skilled golf tournaments. It’s a seven-minute drive from UC San Diego’s North Campus and near a number of world-renowned analysis institutes together with Scripps Analysis, the Scripps Institute of Oceanography, the Salk Institute for Organic Research and Sanford Burnham Prebys.
Walker mentioned the asset enhances DivcoWest’s current native and nationwide life science portfolio. The San Francisco-based firm, which has six different places of work within the U.S., together with Cambridge, Mass., has acquired roughly 59 million sq. ft of business area within the workplace, R&D, lab, industrial, retail and multifamily sectors.
In November, DivcoWest topped off 441 Morgan Ave., the corporate’s fifth life science constructing inside its Cambridge Crossing mixed-use improvement. The 375,000-square-foot lab property may have 12 tales, together with two penthouse flooring. The corporate has already accomplished 1.9 million sq. ft of the 4.5 million-square-foot improvement that can embody 43 acres and have business, residential, retail and eating area. Present tenants embrace Bristol Myers Squibb, Phillips, Sanofi and Cerevel Therapeutics.
Alexandria reinvestments
Alexandria acknowledged in its announcement the sale is an instance of its worth harvesting and asset recycling technique. The REIT capitalizes on the sturdy personal market valuations by sourcing important equity-type capital for reinvestment into value-add improvement and redevelopment initiatives. As of March 31, Alexandria’s extremely leased pipeline of 6.7 million sq. ft of present and near-term initiatives is predicted to generate greater than $610 million of annual incremental web working revenue by early 2026.
Peter Moglia, Alexandria CEO & co-chief funding officer, mentioned in ready remarks the stand-alone asset, now not matches with the REIT’s deal with aggregating its extremely sought-after mega campuses. He mentioned the shortage of high-quality life science belongings mixed with the efficiency of the corporate’s properties creates sturdy demand for funding alternatives. Moglia added the sale underscores Alexandria’s means to monetize its investments at important revenue margins even in difficult occasions.
Alexandria is focusing on $1.5 billion in inclinations and gross sales of partial pursuits this yr. Up to now, roughly $865 million in transactions have been accomplished or are topic to letters of intent and gross sales agreements. As of March, the REIT had a complete market capitalization of $33 billion and 75.6 million sq. ft of area in North America, together with 41.9 million rentable sq. ft of working properties, 9.7 million rentable sq. ft of area of near-term and intermediate-term improvement and redevelopment initiatives and 18.5 million sq. ft of future improvement initiatives. The corporate focuses on life science, agtech and superior know-how campuses in main U.S. innovation clusters together with San Diego, Better Boston, San Francisco Bay Space, New York Metropolis, Seattle, Maryland and the Analysis Triangle in North Carolina.