LaSalle Investment Management has purchased two Class A medical office buildings in San Diego for a total of $147.5 million.
The Chicago-based real estate investment firm purchased the two properties, totalling 253,676 square feet, from Kilroy Realty, a Los Angeles-based REIT. The properties are located at 15004 Innovation Drive in Rancho Bernardo and 10243 Genetic Center Drive in San Diego.
Although LaSalle currently is investing on behalf of LaSalle Medical Office Fund II, a $350 million value-added vehicle launched in 2006, sources familiar with the situation revealed that the fund manager purchased these buildings on behalf of its separate account client, Carmel Medical Office.
Completed in 2008, 15004 Innovation Drive is a six-storey, 150,801-square-foot building fully leased to Scripps Health, which has occupied the property for 15 years. 10243 Genetic Center Drive is a three-storey, 102,875-square-foot property fully leased to Sharp Healthcare, which has been in the space for 20 years. Both lease terms include annual rent increases of three percent. In addition, 10243 Genetic Center Drive offers the potential to expand the property by up to 48,300 square feet.
Both properties were built and developed by Kilroy Realty. The REIT sold the properties as part of its capital-recycling strategy of selling high-value assets then reinvesting the proceeds in other properties. Kilroy has been acquiring assets in the coastal regions of Los Angeles, Orange County, San Diego, greater Seattle and the San Francisco Bay Area. One source told PERE that Kilroy Realty made a $73 million gain on the sale to LaSalle.
HFF marketed the two-property portfolio on behalf of Kilroy Realty.