Alexandria: 500k+ SF Leases Coming Due in SD Next Year
Alexandria Real Estate Equities has had a banner year, but it will have its work cut out for it next year in San Diego when it comes to plugging a hole in expiring leases.
The firm will be striving to renew 572k SF in leases in the San Diego market—the one market operated by Alexandria with the most expiring leases next year. That tidbit comes from a presentation to investors filed by the company with the SEC this week. Among the buildings facing big lease expiration: 125,400 SF at 10300 Campus Point Dr being vacated by Eli Lilly, which is moving next door, and 54k SF at its Nautilus project at 3565 General Atomics Ct in Torey Pines. But the company reports that its in talks for 159k SF in potential tenants at both 3115 (here) and 3215 Merryfield Row at La Jolla Spectrum Tech Park in Torrey Pines.
Like they did earlier this year, officials with Alexandria are cheering 2015's portfolio performance, which saw occupancy rates top 97% (95% in San Diego), see rents climb 17% on average, and inked 4M SF across its portfolio, 809,500 SF of which was in San Diego with such banner deals as leases with Lilly, Otonomy (here), Celgene and Illumina. Activity in the pipeline has ARE officials predicting another 14% to 17% rent jump next year with some $250M in acquisitions and $1B in construction projects on tap.
It already has a 3.3M SF development/redevelopment pipeline across the country through 2018. Among the San Diego projects:
- 5200 Ilumina Way, Bld 6, a $70M, 300k SF office project fully leased to Illumina.
- 3013/3033 Science Park Rd (here) in Torrey Pines, a $105M, 166k SF office development already 81% pre-leased to Celgene.
- 10290 Campus Point Dr, the $241M, 304k SF redevelopment fully leased to Lilly earlier this year.