Clarion Partners Real Estate Income Fund (CPREIF) has entered the San Diego life sciences market 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.
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.
According to Clarion Partners, 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, the company said.
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.”
Fusion is currently 100% leased to medical device company Alphatec Spine, Inc. through January 2031. 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.