Sorrento Mesa life science project lands big pharma tenant

Veteran life science real estate developer Alexandria Real Estate Equities has secured a pharmaceutical giant as its anchor tenant for a newly constructed building in Sorrento Mesa.

Earlier this week, the firm announced that an unnamed, high-credit tenant signed a 10-year lease for 127,382 square feet of space at 10075 Barnes Canyon Road. The single-building project, which is nearing completion, is part of Alexandria’s sprawling, 43-acre SD Tech campus east of Interstate 805 and north of Mira Mesa Boulevard.

The Barnes Canyon project’s anchor tenant is described as a “top 20 pharmaceutical company,” and is expanding its San Diego footprint by nearly 53 percent, according to a news release issued by Alexandria.

The lease represents a little more than half of the 253,079-square-foot building at 10075 Barnes Canyon Road. The project is now 70 percent leased with two other tenants slated to move into the building later this year, said Dan Ryan, co-president of Alexandria.

Started in 1994, Pasadena-based Alexandria operates 42.2 million square feet of lab and office space spread across the nation’s top life science clusters, including Boston, the Bay Area and Seattle. The publicly traded real estate investment trust reported $37.7 billion in total assets at the end of March.

In San Diego, the life science developer’s portfolio includes 7.8 million square feet of space that is more than 95 percent occupied, with its holdings concentrated in Torrey Pines, University City and Sorrento Mesa. The firm is currently developing an additional 1.2 million square feet of space in the San Diego market.

The Barnes Canyon lease is one of the larger life science real estate deals in recent months, as overall leasing activity has noticeably cooled after feverish demand during the early stages of the pandemic. In March, Pfizer’s 230,000-square-foot lease at Torrey View marked the largest new biotech lease in the county in more than a year.

“The market is feeling like it’s kind of getting back on its feet in terms of tenant space, interest and consumption. Demand is coming back,” Ryan told the Union-Tribune. “We, and other landlords, are starting to make some deals. We just have more supply to contend with then we’ve ever had.”

More than 16 percent of lab inventory in San Diego’s biotech core is vacant and nearly 26 percent of space is available for lease, according to data from real estate tracker CoStar. The established core, generally defined by its proximity to UC San Diego, includes University City, Sorrento Mesa, Torrey Pines and the corridor along state Route 56.

“Some of the larger requirements among life science companies have been signed in the past few months, with firms committing to new product in San Diego’s core biotech region,” said Joshua Ohl, CoStar’s senior director of market analytics. “While it might not be a sea-change in terms of rising biotech demand, it will help alleviate some of the supply pressure that the region is facing with new lab space on the way.”

The lease at 10075 Barnes Canyon Road, in the heart of the sector, could also be viewed as evidence that pharmaceutical companies continue to turn their back on downtown San Diego, where developers IQHQ and Stockdale Capital Partners are hoping to establish a new cluster.

“We’ve always thought (downtown) was a very flawed concept,” Ryan said. “The geographic mean for employee location is really somewhere up near (state Route) 56 and Carmel Mountain.”

Alexandria’s SD Tech campus is 50 percent owned by the teachers’ pension fund, CalSTRS.