Longfellow Real Estate Partners constructing its first ground-up life science building in San Diego

Longfellow Real Estate Partners is building its first ground-up life science building in San Diego with construction of the 320,000-square foot Bioterra building.

“As the first ground-up project in our San Diego portfolio, Bioterra is an exciting step forward in Longfellow’s commitment to support the rapidly growing San Diego life science market,” said Nick Frasco, chief investment officer (West) and marketing director at Longfellow.

The Sorrento Mesa project replaces a three-building office park that Longfellow bought last year. The office buildings were torn down to make room for Bioterra.

“We acquired the site with a plan from the beginning to scrape the existing buildings and develop more density on the site to support a lab building,” Frasco said.

Frasco declined to say how much Bioterra will cost to build, but he said it’s expected to be finished by the summer of 2024.

Trendsetter

With HOK, headquartered in New York, as the architect and McCarthy Building Companies as the general contractor, Bioterra is being built with what Longfellow Partners call “climate-conscious design.”

“It’s going to be very striking. We think it’s really going to be a beacon for the Sorrento Mesa market,” Frasco said.

Among other things, Bioterra will be the first life science building in San Diego to have an all-electric heating and air conditioning system, according to Longfellow Partners.

Typically, the systems use natural gas, Frasco said.

“Additionally, it’s going to be the first life science building in San Diego with a rooftop terrace that will be complemented with a full-scale restaurant, conference center and fitness center,” Frasco said

The overall design of the building including its orientation on the site is meant to provide shade and allow for maximum daylight to enter the building, with lots of glass.

The building also has wide overhangs that provide shading.

To conserve water, the building will have low-flow plumbing fixtures, will use reclaimed water for irrigation and cooling towers, and will use native plants in the landscaping. Materials with a high recycled content will be used in construction.

Most of the parking will be below ground to leave 68% of the site as open space.

“This environmental component is really important,” Frasco said. “Longfellow hopes that this project will pave the way for a new era of environmentally sustainable lab buildings.”

Averaging 60,000 square feet, Bioiterra’s floorplates are bigger than most other lab buildings, according to Frasco.

“The floorplates are designed in such a way that they can accommodate multiple tenants per floor and the footprint of the building also provides for maximum light penetration despite the larger size pf the building.”

No leases have been signed yet, but Frasco said Longfellow is “in conversations with prospective tenants now.”

“We’re pleased with the activity we’ve had on it to date and we fully anticipate significant preleasing for the project,” Frasco said. “We will consider partial floors up to full building users. We’ll respond to the tenant demand that presents itself.”

Ted Jacobs, vice chairman of CBRE and lead of its regional life sciences practice, said that Bioterra “is a newer type of construction that really we haven’t seen in San Diego” because of its large floor plates.

“You’re going to see a lot of buildings designed in a similar fashion,” Jacobs said.

Returning to Normal

Investment in life science companies has cooled of late but Frasco said that he is confident in the long-term prospects for life science real estate in San Diego County.

“After an undeniable pandemic-driven surge in life science venture capital investment, we’re seeing a bit of a return to more normal or pre-pandemic levels,” Frasco said. “We’re certainly being cognizant of that as we look ahead at the supply pipeline. However, we continue to feel confident in the long term strength of the San Diego market being a driver for research and development.”

According to CBRE, Bioterra’s neighborhood of Sorrento Mesa had more leasing activity in the second quarter of 2022 than any other submarket in San Diego with 126,021 square feet of leases signed with Sorrento Valley next with 54,210 square feet of space leased.

When it comes to leasing, Jacobs said that Sorrento Mesa has even outpaced Torrey Pines – the historical hub of the life science market in San Diego.

“Torrey Pines last year was the largest submarket in lab space. Now, Sorrento Mesa has surpassed that due to all the office conversions and ground-up construction,” Jacobs said.

Overall, CBRE reported that leasing activity slowed in the second quarter at 231,000 square feet compared to 1.5 million square feet of space that was leased in the first quarter, but CBRE attributed the slowdown simply to a lack of available space.

Jacobs said that company valuations have declined, resulting in fewer companies going public.

“A lot of people in the industry are saying hopefully by the fourth quarter, the public markets are going to get better but San Diego compared to the rest of the country has fared well,” Jacobs said.

Without saying where, Frasco said that Longfellow is planning more ground-up developments in San Diego.

“We continue to invest in the region. We’re constantly evaluating new opportunities. We are certainly dedicated to continuing to grow in San Diego,” Frasco said. “Most likely the majority of what you see from us going forward is growing our ground-up development portfolio in addition to best-in-class conversion opportunities.” ■