(EDITOR’S NOTE: According to a source with knowledge of the transaction, the property sold for $54 million, or about $444 per square foot.)
SAN MATEO, Calif. – Clarion Partners Real Estate Income Fund Inc. (CPREIF) has strategically expanded its property portfolio with the acquisition of Fusion Life Science HQ*, a 121,541 square foot hybrid creative office and research and development (R&D) building in San Diego’s Carlsbad submarket.
San Diego is a top three U.S. innovation hub that’s dominated by R&D, life science and technology firms, including many leading pharmaceutical and biotechnology companies and a sizeable medical device and diagnostics community. Due to its strong talent base in science, technology, engineering and math (STEM) disciplines, Carlsbad continues to attract new tenants as well as established companies looking to further expand within the North County submarket.
Commercial real estate services and investment firm CBRE noted in a November 2021 report that tenant demand for laboratory and manufacturing space in San Diego had “increased astronomically” over the previous six quarters and that 2021 laboratory leasing activity totaled 2.1 million square feet – 24% more than the 2020 record annual total of 1.7 million square feet.
“We’re excited to not only increase CPREIF’s West Coast holdings, but also to enter the San Diego life sciences market for the first time,” said CPREIF Portfolio Manager Janet Souk. “The increased demand for life sciences real estate in Carlsbad continues to explode. Fusion’s unique attributes, coupled with a strong tenant, reinforced our decision to add this particular property to our portfolio.”
Constructed in 1996, the Fusion campus was renovated in 2020 and features amenities such as a landlord-owned solar panel roof system and ample parking, as well as a fitness center, electric vehicle chargers, fire pits, bocce ball and basketball courts, putting green, barbeque station and outdoor meeting amphitheater. The Class A property is located less than three miles east of Interstate 5 and 12 miles west of Interstate 15. Moreover, it is directly adjacent to the McClellan-Palomar Airport in the North County submarket.
Fusion is currently 100% leased to Alphatec Spine, Inc. through January 2031. Alphatec is a leading medical device company that designs, develops and manufactures products for the surgical treatment of spine disorders. The campus serves as Alphatec’s global headquarters with custom R&D, office and warehouse build-outs, including a surgery experience center and training center for surgeons.
Clarion Partners, a leading U.S. real estate investment manager, is part of Franklin Templeton’s alternatives business, which spans a broad range of strategies, including real estate, private credit, hedge funds and secondary private equity and co-investments with approximately $212 billion in assets under management as of April 4, 2022.
About Clarion Partners Real Estate Income Fund Inc. (CPREIF)
CPREIF offers individual investors direct access to a portfolio of privately-held, income-producing commercial real estate properties through an innovative investment fund driven by Clarion’s deep real estate expertise. CPREIF is a non-diversified, closed-end management investment company that continuously offers its common stock. The fund’s investment manager, Legg Mason Partners Fund Advisor, LLC is an indirect, wholly owned subsidiary of Franklin Resources, Inc. (“Franklin Resources”) and the fund’s investment sub-adviser, Clarion Partners, is an indirect, majority-owned subsidiary of Franklin Resources. In addition, the fund’s securities sub-adviser, Western Asset Management, also is an indirect wholly owned subsidiary of Franklin Resources. Hard copies of the fund’s complete audited financial statements are available free of charge upon request. More information about CPREIF is available at CPREIF.com.
About Clarion Partners
Clarion Partners, an SEC registered investment adviser with FCA-authorized and FINRA member affiliates, has been a leading U.S. real estate investment manager for more than 39 years. Headquartered in New York, the firm maintains strategically located offices across the United States and Europe. With $71 billion in total assets under management, Clarion Partners offers a broad range of real estate strategies across the risk/return spectrum to its more than 500 domestic and international institutional investors.
About Franklin Templeton
Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 155 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers boutique specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives, and multi-asset solutions. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has 75 years of investment experience and approximately $1.5 trillion in assets under management as of March 31, 2022.
