AIMCO Achieves +50% IRR on Partial Sale of Equity Interest in Life Science Developer IQHQ

Apartment Investment and Management Company, AIMCO, IQHQ, San Diego, San Francisco, Bay Area, South San Francisco, Redwood City, RaDD, Research and Development District
Photo by Stephen Leonardi on Unsplash

By Jon Peterson

Denver-based Apartment Investment and Management Company (AIMCO) achieved a very strong return on the sale of its 22 percent passive equity interest in IQHQ, a major life science development firm with offices in San Diego and Boston. The sale produced a greater than 50 percent IRR over the hold period of this investment, according to AIMCO’s second-quarter earnings report.

The proceeds from the sale by AIMCO were $16.5 million. AIMCO still has some passive equity interest in IQHQ. The amount is 2.4 million shares valued at $59.7 million.

The relationship with IQHQ will still allow AIMCO to collaborate with IQHQ on future development opportunities in the life science arena that also include a multifamily component.

IQHQ has at least two assets that it owns in the San Francisco Bay Area. These are Elco Yards in Redwood City and 580 Dubuque in South San Francisco. The company has also proposed a new 654,000 development project in Redwood City located at 10-20 Dolphin Drive.

In San Diego, the company is developing the RaDD, Research and Development District, a 5-building, 1.7 million-square-foot lab office and retail project on North Harbor Drive. 

AIMCO has been active in the San Francisco Bay Area and Seattle in the sale of some of its assets. One of these transactions was the $127 million sale of the 246-unit Pathfinder Village complex in Fremont, Calif. Pacific Urban, based in Palo Alto, was the buyer. The property is located at 39800 Fremont Boulevard, Fremont, Calif. Proceeds from the sale were $71.8 million, net of the repayment of the existing property debt and transaction-related costs.

The public REIT also sold one property in Seattle recently. This was the $53 million sale of the 104-unit Cedar Rim apartment complex in Renton to MIG Real Estate, a multifamily investment firm based in Newport Beach Calif. The sales proceeds on this asset, minus the repayment of the existing property debt and related transaction costs, were $50.2 million.

AIMCO is nearing another sale in Seattle. The public REIT is now under contract to sell the 2900 on First complex in Seattle for $69 million, or $511,111 per unit. The transaction is set to close sometime in August of 2022. The property has 135 apartment units and 14,000 square feet of retail. It is located at 2900 First 1st Avenue.