Oxford Properties Group, a global real estate investor, asset manager and business builder announced the purchase and long-term lease back of Ionis Pharmaceuticals’ 18.4-acre life science campus and corporate headquarters. Located in the established San Diego life science submarket of Carlsbad, the campus features approximately 250,000 square feet of existing life science and office space. As part of the transaction, Ionis will lease the properties for a minimum of 15 years.
The transaction follows on from Oxford’s entrance into the San Diego life science market in February this year via a US$464 million acquisition of a 13-building portfolio. It builds on Oxford’s already global life sciences portfolio and growing West Coast presence with high quality assets in the Bay Area and Seattle. The acquisition grows Oxford’s existing San Diego life science portfolio to 900,000 square feet of income-producing properties, which will increase to over 1.2 million square feet upon completion of its development pipeline in the local market.
“Our team continues to create sustained yet highly-targeted growth against one of our highest conviction global investment strategies, to build a global life science business of scale,” said Chad Remis, Executive Vice President, North America at Oxford in a statement. “Today’s acquisition adds another leading life sciences company to our business as well as high quality income-producing assets to our growing portfolio plus complements our development pipeline in San Diego. The transaction perfectly encapsulates the purpose of our life science business; by investing Oxford’s capital and capabilities to own, build and manage this highly technical real estate infrastructure we are able to free up the resources of life science firms to better focus on what they do best – research and create the life changing therapeutics of tomorrow. We look forward to working with Ionis as they continue to advance their science for the benefit of society at large.”
“Ionis has long maintained a strong financial foundation to support our business objectives. While we have a healthy cash balance, we also have near-term capital needs to scale our organization to deliver on our growth initiatives. This transaction will provide us with significant cash proceeds while allowing us to conduct our day-to-day operations as we normally do. We have worked closely with Oxford to create a bespoke solution that can accommodate our future growth and retain flexibility as our business evolves,” said Elizabeth L. Hougen, executive vice president and chief financial officer of Ionis.
The Ionis campus features three assets of one and two storeys and comprises approximately 250,000 square feet across 18.4 acres. The buildings are all modern vintage, with the oldest completed in 2011 and the most recent in 2021. They feature chemistry labs, biology labs and R&D support systems as well as modern office space. The campus is located in Carlsbad, part of the prominent San Diego North County life science cluster and home to leading firms such as Novartis, Thermo Fisher and Genentech. The North County has become highly sought after by life science firms in recent years, which has dropped the vacancy rate to 3.6%1.
San Diego has defined itself as one of the most important life science markets globally. Nearly 40% of its population holds a bachelor’s degree or higher, rapidly outpacing the national average of 28%, and its universities graduate more STEM talent than any other region in the US. Its ecosystem is anchored by renowned research institutions and non-profits including San Diego State University, UC San Diego, Scripps Research and the Sandford Burnham Prebys Medical Discovery Institute. San Diego’s life science market has witnessed record demand over recent years, leading to significant and sustained rental growth with asking rents growing by 34% in 2021.
“Our purchase of the Ionis campus adds to Oxford’s significant presence in a top three global life science market that is characterized by high barriers to entry,” said Tycho Suter, Vice President of Investments at Oxford. “We have long-term conviction in the San Diego life sciences market, which is supported by its strong STEM presence and a highly-skilled labour force as well as world-renowned research and academic institutions. Together, it creates a highly innovative ecosystem that captures research funding, venture capital and business growth to the region.”