King Street Buys San Diego Life Science Campus for $120M
The transaction also involved a seller carry-back loan.
King Street Properties has purchased Esplanade, a 241,963-square-foot life science campus in San Diego. Alexandria Real Estate Equities sold the asset for $120 million, according to public records. The transaction also involved a $166 million seller carry-back loan.
Newmark, on behalf of the seller, brokered the transaction of three of the buildings: 4755 Nexus Center Drive, 4757 Nexus Center Drive and 4796 Executive Drive. The agreement also encompasses the sale of a fourth building, which is scheduled to be finalized in late 2025.
Situated in San Diego’s University Town Center submarket, the Esplanade campus is adjacent to Interstate 805 and is some 13 miles north of downtown San Diego.
The new owner intends to enhance the campus by adding shared amenities, upgrading the current lab infrastructure and expanding the available lab space. Planned common-area amenities include a conference room, a fitness center and improved outdoor gathering areas.
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The three buildings were built between 1991 and 2006. Back in 1998, Alexandria purchased 54,540 square feet of office space at 4757 Nexus Center Drive for $16.2 million from Matrix Pharmaceutical, according to CommercialEdge data. In 2011, the company acquired from Arden Realty 45,000 square feet of office space at 4755 Nexus Center Drive for $7.4 million, according to the same source. Afterward, the two properties were merged and rebranded as Esplanade – 4755 & 4757 Nexus Center Drive.
The Newmark team included Executive Managing Directors Brunson Howard, Rick Reeder and Brad Tecca, Co-Head of U.S. Capital Markets Kevin Shannon and Associate Tanner Harris.
Back in September, King Street Properties completed the first building at The Landing in Burlingame, Calif. At seven stories, the 300,000-square-foot structure at 1699 Bayshore will anchor the 4.5-acre campus. The second building, 1701 Bayshore, is currently under construction. It will be six stories tall and measure 203,500 square feet.
San Diego’s life science sector
Due to a reduction in venture capital investments and an influx of new office spaces entering the market, the life science sector—which had previously driven office development in the years following the pandemic—is now facing an oversupply issue.
Between 2021 and 2023, more than 30 million square feet of lab space commenced construction. However, only 948,000 square feet of new lab space broke ground in 2024, according to a recent CommercialEdge report.
San Diego’s life science sector still attracts venture capital investment, with the metro recording $651 million in total office sales investment through the end of November. The office development activity remained strong with around 3.1 million of square feet underway, while the vacancy rate clocked in at 20.5 percent, up 280 basis points over a 12-month period.
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