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10/13/16
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An Alexandria Real Estate Equities affiliate closed on a significant office/lab buy in San Diego, paying $182.5 mil for Torrey Ridge Science Center, a three-building, 291.8k sf ($625/sf) life science campus in the Torrey Pines area. The property was sold by Walton Street Capital and SteelWave.
Located at 10578, 10614 and 10628 Science Center Dr, Torrey Ridge Science Center is a Class A life science campus leased to industry leaders such as Regulus Therapeutics, Pacira Pharmaceuticals, Nitto BioPharma, Interpreta and BP Technology Ventures. Many of Torrey Ridge Science Center’s existing leases are below market. It was 87 percent leased at the time of sale.
Torrey Ridge Science Center was built in 2004 and since 2012 the sellers invested $55 mil in base building and tenant improvements, including upgrading common areas, signage and landscaping to first-class standards as well as creating a new dedicated central plant and adding chilled water systems for each building. The campus also includes newly built tenant amenities including a fitness center, conference center and Wich Addiction café.
Louay Alsadek and Hunter Rowe of CBRE were the investment advisors and Rich Danesi and Ryan Egli of CBRE were the market experts representing the sellers, Walton Street Capital and SteelWave. Alexandria Real Estate Equities Inc represented itself in the transaction.
“Torrey Ridge Science Center is one of the premier life science campuses in the region,” Alsadek said. “SteelWave and Walton Street’s extensive, relevant renovations enhanced the campus even further resulting in considerable interest from large institutional national and international buyers.”
“This was a highly strategic acquisition for Alexandria in Torrey Pines, one of our core San Diego submarkets,” said Daniel J. Ryan, executive vice president and regional market director of San Diego for Alexandria Real Estate Equities, Inc. “The Torrey Ridge Science Center campus provides us with the opportunity to achieve significant cash flow growth as leases are renewed or rolled over, given that many of the in-place leases are below market. The campus also gives us the flexibility to convert traditional office space, which is approximately 22 percent of the project, to wet lab research space in order to respond to strong demand from leading biotech entities in San Diego.”
San Diego is home to one of the top three life science clusters in the United States. According to CBRE, the San Diego life science direct vacancy rate in second quarter 2016 was 6.0 percent and in Torrey Pines the rate was 1.4 percent.
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