San Diego Life Science Portfolio Trading for $576M
The market’s life science sector is rapidly expanding with burgeoning demand.
City Office REIT has entered into definitive agreements to sell all of its life science holdings in the Sorrento Mesa submarket of San Diego for $576 million. The properties are trading unencumbered by debt to an unnamed buyer.
The sales will be completed through two separate agreements. The northern portion of the portfolio is scheduled to close in December 2021 for $395 million. The southern portion of the portfolio is scheduled to close in February 2023 for $181 million. Both sales are subject to customary closing conditions.
“Since our initial acquisition of properties in Sorrento Mesa in 2017, we have re-positioned, re-tenanted, renovated and strategically enhanced our portfolio,” said CEO James Farrar. “The resulting aggregation of life science assets and over one million square feet of zoned life science development potential created an extremely valuable portfolio.”
The sale speaks to the burgeoning life science market in San Diego.
Demand for lab space has increased 280% since March 2020, according to research from JLL. The demand is driving both leasing and investment activity in the market.
“The expansion of big tech and the incredible growth in the life sciences industry, which is displacing office tenants as offices buildings are converted to lab buildings, have been the driving forces behind the San Diego office leasing activity,” Tim Olson, senior managing director at JLL, told GlobeSt.com in an earlier interview.