JV Secures $265M Loan for San Diego Life Science Campus

Sterling Bay and Harrison Street have closed on a $265M construction loan from Bank OZK for Pacific Center, a $650M life sciences campus in San Diego.

The partners, both based in Chicago, immediately broke ground for the life sciences mega-project, which will be built in phases over the next four years at a 1.4M SF site in the city’s Sorrento Mesa Sorrento Mesa submarket.

More than 500K SF of research space is planned at the Pacific Center campus, along with a 28K SF amenity center and a parking facility for 1,700 vehicles.

“Securing a loan for new construction in today’s economic climate is no small feat, which speaks to the confidence our finance partners have in Sterling Bay and Harrison Street’s unique approach to developing next-generation lab space,” said Andy Gloor, CEO of Sterling Bay, in a statement.

“San Diego’s life sciences ecosystem is thriving, and the demand for modern, highly amenitized research space is at critical max,” Gloor said.

In September 2021, the partners paid $576M to buy the site in Sorrento Mesa from City Office REIT. The purchase included five existing buildings between 10390 and 10445 Pacific Center Court as well as 13 adjacent acres.

Pacific Center is the second massive life science campus to get underway in San Diego in the past year. Biotech REIT IQHQ is developing the $1.6B San Diego Research and Development District on a waterfront site in San Diego previously known as the Manchester Pacific Gateway.

IQHQ’s 1.3M SF life science hub will include several mid-rise buildings clustered around a 17-story tower, as well as 150K SF of on-site amenities, including ground-floor retail space.

In 2020, Creative Science Properties changed its name to IQHQ and formed a REIT. Headquartered in Solano Beach, the company was started by Alan Gold, who founded BioMed Realty Trust and sold it to Blackstone for $8B.

Since then, IQHQ has raised nearly $3B and developed more than 5.5M SF of life sciences space that it owns and operates.

IQHQ also is redeveloping six downtown blocks along Redwood City’s Caltrain corridor on the San Francisco Peninsula. The district will have 540 apartment units and 600K SF of office and life science space that the company is building on spec, with four buildings to be delivered in 2024.