San Diego Life Science Project Gets $265M
Bank OZK provided financing for the $650 million development.
Sterling Bay, in partnership with Harrison Street, has secured $265 million in construction financing for Pacific Center, a five-building life science project in the Sorrento Mesa submarket of San Diego. Bank OZK originated financing for the development, which broke ground last week. The $650 million campus is designed by Gensler and will be developed in multiple phases during the next four years, with the first phase, encompassing some 500,000 square feet, expected to be completed in the last quarter of 2024.
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This is not Sterling’s first project with partners Harrison Street. The companies have recently completed two life science developments, in San Diego and Chicago, totaling 1 million square feet. Other projects are expected to be announced in Philadelphia, Denver and Raleigh-Durham, according to Sterling Bay.
While San Diego’s demand for life science products reached a critical point, Pacific Center will be a needed product that will also support the growth of research industries in the area, said Sterling Bay CEO Andy Gloor in prepared remarks.
Pacific Center will comprise several lab buildings, a mass-timber amenity space totaling 28,000 square feet and a 1,700-spot parking facility. The buildings will provide fully equipped research capabilities, creative office spaces, indoor and outdoor areas, conference rooms and a fitness center.
A growing life science pipeline
Sterling Bay purchased the two development sites located at 5975 and 9985 Pacific Heights Blvd. in 2021 from City Office REIT Inc., according to CommercialEdge. Situated on 8 acres, the development will be close to interstates 5 and 805, some 15 miles from downtown San Diego and within 17 miles of San Diego International Airport.
Together with the Bay Area, San Diego remains one of the West Coast’s top life science markets. Earlier this month, DivcoWest paid $86 million for a facility in Torrey Pines, Calif., near the University of California, San Diego. Elsewhere in the metro, in the first quarter of 2023, BentallGreenOak acquired a life science asset while Longfellow Real Estate Partners secured more than $200 million for a similar project.
