Alexandria, Nuveen Sell Majority Stake in $161M San Diego Asset

9625 Towne Centre Drive. Image courtesy of Alexandria Real Estate Equities

Alexandria Real Estate Equities has recapitalized a joint venture which owns 9625 Towne Centre Drive, a San Diego life science asset. The research facility was purpose-built for Takeda Pharmaceutical Co.

Alexandria and Nuveen sold a 70 percent interest in the property at a total valuation of $160.5 million or $981 per rentable square foot, at a capitalization rate of 4.5 percent. Nuveen fully divested its shares in the asset.

Following the transaction, Alexandria’s ownership stake decreased from 50.1 to 30 percent while retaining operating control of the facility. Sale proceeds, totaling $32.3 million, will be reinvested in the REIT’s development pipeline.

A LEED Gold-certified facility

The 163,648-square-foot, LEED Gold-certified property came online on some 7 acres in 2019. Alexandria developed the three-story building by teaming up with Marshall Andrews and DPR Construction as general contractors, while LPA Design Studios served as architect. The project involved the first large-scale use of cross-laminated timber in San Diego and 27.6 percent of the construction costs were funded by green bonds proceedings.

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The building houses specialized equipment and contiguous, integrated non-technical workflow space supporting Takeda’s scientific research pipeline, Daniel Ryan, co-chief investment officer & regional market director at Alexandria, said in prepared remarks. The property is one of Takeda’s three global centers, conducting research into debilitating gastrointestinal and neurological diseases.

Situated in San Diego’s University City neighborhood, the life science building is close to numerous research & development companies such as Bionano Genomics, Tanabe Research Laboratories, Epic Sciences and Genomatica, to name a few.

Together with the Bay Area, San Diego remains one of the West Coast’s top life science markets. In May, Sterling Bay and Harrison Street obtained $265 million in construction financing for a five-building project in the Sorrento Mesa submarket.