Pfizer sells its San Diego campus for 5 million.

Pharmaceutical giant Pfizer has finalized the sale of its extensive San Diego campus to a life science-oriented commercial real estate firm, marking one of the most significant transactions in the region over the past year. The five-building facility, located on Science Center Drive in Torrey Pines, was sold to BioMed Realty, a San Diego-based company under the ownership of Blackstone Real Estate, for an estimated 5 million, as confirmed by property records.

According to Joshua Ohl, senior director of market analytics at CoStar, this transaction represents the highest sale price for office and lab space in San Diego County within the last year. Ohl noted that although the local life science real estate market has experienced a slowdown, it is rare for properties of this magnitude to become available in the prime Torrey Pines area.

In a strategic move last year, Pfizer solidified its commitment to the region by signing a 15-year lease for 230,000 square feet at the Torrey View campus, currently known as Torrey Heights. This agreement marked the largest new biotech lease in the county within the preceding year. The new Torrey Heights project, which spans 10 acres and overlooks the ocean, is home to Pfizer’s expanding oncology division, in addition to a program dedicated to providing lab space and resources for emerging biotech startups.

Pfizer’s recent lease signifies a considerable reduction from its previous occupancy of approximately 631,000 square feet at its Science Center Drive campus, as life science companies grapple with increasing economic pressures and are adjusting their office and lab space requirements accordingly. Pfizer initially acquired the Science Center Drive property in 2004, which had served as a hub for its research and development activities.

While the specifics regarding whether Pfizer will retain any portion of the Science Center Drive space remain unclear, the asset acquisition by BioMed Realty expands its San Diego portfolio to 2.9 million square feet, with approximately 90% already leased. Although the specific future development plans for the site have not been disclosed, BioMed Realty expressed a commitment to creating a premier environment in support of its tenants’ missions to enhance human health.

The demand for life science office and lab space has been affected by economic fluctuations, with vacancy rates recently reaching historical highs. Ohl reported that the current vacancy rate stands at 23.6%, marking a ten-year peak. This situation is largely attributed to the accelerated pace of new constructions and redevelopments initiated during the pandemic.

Despite these fluctuations in demand, investors remain interested in the San Diego market, indicating confidence in the region as a core hub for biotechnology. This recent sale further illustrates the ongoing value placed on real estate in this sector. In a related development, Pfizer also announced layoffs at its Science Center Drive location, affecting 56 employees due to a proactive adjustment in research and development focus.

As the life sciences landscape continues to evolve, both Pfizer and BioMed Realty’s decisions will play crucial roles in shaping the future of commercial real estate in San Diego.