By Meghan Hall
BioMed Realty, a Blackstone company, is quickly expanding its footprint in the Sorrento Mesa neighborhood of San Diego. During the fourth quarter, the firm closed on a $115 million deal to acquire two buildings that are currently fully-leased to Qualcomm. Public records indicate that the seller is a limited liability company affiliated with La Jolla Development Company.
The buildings are located at 9940 and 9950 Barnes Canyon Road, and they total 139,807 square feet. According to a fourth quarter report released by brokerage firm Newmark, the asset traded for about $823 per square foot. Known as the Sorrento Corporate Center, the property includes both a mix of industrial and office space and features fiber optic connectivity and a flexible design. The campus is located near a number of other commercial firms, including Sony Interactive Entertainment, HUB International and Verizon Connect.
BioMed Realty’s latest acquisition comes just a couple of months after the company acquired the Pacific Tech Center for $46.7 million, or about $688 per square foot. Also located in Sorrento Mesa, the property was sold by Avenue Capital Partners and totals 67,832 square feet.
San Diego’s industrial sector has continued to benefit from changes in consumer behavior. Widespread shifts from in-person shopping to e-commerce have dramatically heightened demand for warehouse and industrial space. E-commerce companies often must compete directly with life sciences and R&D firms to get their hands on limited inventory, whether for leasing or investment purposes.
According to Newmark, such “unprecedented demand” will only fuel aggressive rent growth and property appreciation in the near future. Life sciences companies are mainly buying close-in, well-located product, while their e-commerce counterparts are building more on the outskirts of town, where they can procure larger building footprints. The future of the market will depend on how these companies continue to interact, and how much product they will ultimately be able to produce.
