BioScience Sells Stake in San Diego Life Science Assets
- Apr 06, 2020
BioScience Properties Inc. has welcomed a new partner in the ownership of two life sciences properties totaling approximately 235,000 square feet in San Diego, the third-largest life sciences hub in the U.S. BioScience sold an interest in 10770 Wateridge Circle and 6325 Lusk Blvd. to investment management firm Harrison Street for an unspecified amount.
While neither BioScience nor Harrison Street have publicly disclosed the terms of the transaction, San Diego County records indicate that a transfer in ownership at 10770 Wateridge Circle and 6325 Lusk Blvd. involving transactions valued at a respective $135.9 million and $22.6 million occurred on April 1, 2020.
BioScience has owned 10770 Wateridge Circle and 6325 Lusk Blvd. since 2018, when it purchased the then-vacant buildings in separate transactions. With the sale of a stake in the assets to Harrison Street, the company will be “partnering with longer term capital,” Carly Lake, vice president, acquisitions & project management with BioScience Properties Inc., told Commercial Property Executive.
Located in the Sorrento Mesa submarket, the 185,000-square-foot 10770 Wateridge and the 50,000-square-foot 6325 Lusk first opened their doors in 1990 and 1988, respectively. In 2018, with $70.5 million of financing in hand, BioScience commenced the conversion of the properties from general office buildings to Class A life sciences facilities offering laboratory, manufacturing, R&D and office space. The company reintroduced 10770 Wateridge to the market as TEN770 in late 2019 following the completion of a $20 million renovation program. Combined, the properties are currently 70 percent leased, with agreements under negotiation for the remaining space.
Life sciences under the microscope
The U.S. life sciences sector has been thriving, with laboratory vacancy rates remaining lower than those found in the office sector, according to Cushman & Wakefield’s Life Sciences 2020 report. As the country braces for pandemic-induced economic turmoil, the life sciences sector may very well be positioned to weather the storm better than other commercial property types. As noted in the report, the upward trend in occupancy will tend to give the life sciences sector a degree of recession resistance.
The impact of the coronavirus on life sciences real estate, however, extends beyond fundamentals. “It shines a very bright light on the contribution to society and value of the industry as a whole,” Lake said. “It may also inspire companies to keep some level of manufacturing in the US.”