Return to search

TIAA invests $256m in ongoing life science RE push

The investment manager also bought a 70 percent stake in a California retail center last week.

TIAA Global Asset Management is continuing its push into life sciences real estate with recent acquisitions of stakes in two California properties.

Last month, the New York-based investment manager purchased 45 percent stakes in two San Diego buildings for a total of $256 million from Alexandria Real Estate Equities (ARE). The properties are 10290 Campus Point Drive, a 305,000 square foot redevelopment project in San Diego that is fully leased to pharmaceutical company Eli Lilly; and 10300 Campus Point Drive (pictured), a 450,000 square foot space primarily leased to Celgene Corporation, Eli Lilly and the University of California. ARE bought the first building in July 2015 and acquired the second property in December 2010 for a combined $219 million, according to real estate data provider Real Capital Analytics (RCA).

“The burgeoning science and biotech sector bodes well for properties catering to this market and we believe that employment growth and the increased demand for healthcare will continue to bolster this sector,” said Michael Boss, a director on TIAA’s west coast real estate acquisitions team, in a statement last week. “These investments offer the diversification benefits of adding additional life science office assets to our office portfolio, and also further diversify our exposure across investment styles given that we are acquiring an interest in one core stabilized property, one redevelopment property and the opportunity for future development, which will generate significant long-term value.”

TIAA bought stakes in two other life sciences properties owned by ARE in the past year. In February, TIAA bought minority stakes in two San Francisco buildings for a total of $262.9 million and in August, the firm bought a 70 percent stake in the Cambridge, Massachusetts headquarters for biotechnology company Biogen for $190.1 million, according to local media reports. In all three transactions, ARE retained the remaining interests in the assets.

In other recent deals, TIAA bought a 70 percent stake for an undisclosed price in the Pacific City Shopping Center in Huntington Beach, California from DJM Capital. The firms announced the joint venture last week, saying that California-based DJM will retain a 30 percent stake and manage the 109,000 square foot outdoor retail center. DJM, a local developer, bought the property in November 2012 as a development site for $25 million, according to RCA.

“Pacific City is aligned with our vision for the types of retail investments that will flourish in the future,” Boss said in a statement last week. “Top-quality malls have historically been strong and stable performers with high net operating income growth and low volatility compared to other property sectors. The retail landscape may be changing, yet assets like Pacific City will continue to attract consumers looking to enhance their shopping experience with dining and entertainment options.”