Medical Firm Relocates HQ in $113M Lease

According to Daniel J. Ryan, principal with San Diego-based Veralliance, NuVasive will occupy the 143,614 sf in two existing buildings at 7473 Lusk Blvd. (71,112 sf) and at 7475 Lusk Blvd. (72,502 sf). NuVasive also has options to lease additional space in a third building that will begin construction in January 2009 and add approximately 125,000 sf to the Sorrento Summit campus.

NuVasive will pay base rent of $2.43 per sf, escalating at an annual rate of 3% over the 15-year period of the lease, according to public filings by the company, which is listed on Nasdaq. Relocation to the new facility is expected to be completed in phases in the first and second quarters of this year.

NuVasive says that the agreement with Veraillance provides for facility expansion rights to an aggregate of more than 300,000 leased sf, under terms of which the medical technology company is required to make minimum lease payments, including operating expenses, of $2.4 million in 2008, $6.1 million in 2009, $6.4 million in 2010, $6.6 million in 2011, $6.8 million in 2012 and $84.9 million thereafter for a total of $113.2 million over the 15-year period.

NuVasive is relocating and expanding its headquarters from its current location on Towne Centre Drive. Occupancy will take place in phases as tenant improvements complete, with move-ins beginning in April. After its relocation, NuVasive expects to sublease its current facility through August 2012, when its lease on the existing space expires.

In the lease with Veraillance, NuVasive was represented by Jeff Manley of Cresa Partners West Inc. The building owner was represented by Chad Urie of Colliers International and Brian Driscoll of Grubb & Ellis|BRE.

Ryan reports that Veralliance intends to start development in the fall of this year on the third building at Sorrento Summit, which will be designed by architect Austin Veum Robbins Partners. Veralliance acquired Sorrento Summit, previously called Lusk Bioscience Campus, in 2004. The two buildings in the existing campus totaling 222,330 sf were previously occupied by Elan Pharmaceuticals, which vacated the space in December of 2007. Helicon Therapeutics has leased 78,716 sf at 7373 Lusk Blvd. and is the only other tenant at the campus.

Veralliance is implementing numerous tenant improvements for NuVasive. The building at 7473 Lusk Blvd. will feature a new dedicated entry and lobby, three-story stair and elevator renovations, significant upgrades of existing second and third floor office space and new basement shipping and receiving and warehouse space. The building at 7475 Lusk Blvd. improvements include an upgraded main lobby and conference center, improvements to the first, second and third-floor office space, new operating, testing, demonstration, and training suites, and new quality control and test labs.