Alexandria Real Estate Equities plans to develop 680,000 square feet of biotech space after its acquisition of an aging retail center in San Diego’s University Town Center neighborhood, according to company filings.

The proposed project would encompass considerably more than the 400,000 square feet originally slated to be included when Alexandria announced plans in 2020 to redevelop the 33-year-old Costa Verde Center retail complex as a mixed-use project in partnership with property owner Regency Centers. At that time, the project was slated to include retail and hotel elements.

In a change of plans, Jacksonville, Florida-based Regency Centers announced last week it sold the center at 8508-8650 Genesee Ave. to Alexandria for $125 million. A Regency Centers executive told CoStar News the company decided the property’s “highest-and-best use was no longer retail” and it would reinvest proceeds elsewhere as part of its core focus on grocery-anchored shopping centers. Regency is no longer involved with the Costa Verde redevelopment, officials said.

Pasadena, California-based Alexandria said in a Jan. 6 regulatory filing that it completed the re-entitlement process at Costa Verde and now expects to develop 680,000 square feet of office and lab space on the property. Combined with other nearby biotech office properties it owns in UTC, the company said this will help Alexandria form a “mega campus” aggregating 1.7 million square feet after in-place leases expire during 2022 at Costa Verde Center.

An Alexandria spokeswoman told CoStar News the company was not providing further comment.
“This is absolutely one of the best sites on the West Coast,” Dan Ryan, co-chief investment officer for Alexandria, told the San Diego Union-Tribune, regarding the Costa Verde property after the sale closed Jan. 12. “It’ll go from being an old, dilapidated retail center to a vibrant, exciting community center and we’re really enthusiastic for the potential of the site.”

Alexandria is among the nation’s largest holders of biotech-focused real estate, with a portfolio spanning more than 38 million square feet and valued at more than $28 billion as of Sept. 30. A December regulatory filing said Alexandria is planning more than $3 billion in acquisitions during 2022 in regions including San Diego, San Francisco, Seattle and North Carolina’s Research Triangle area.
The company is among several looking to feed rapidly rising demand for biotech space at a time construction of specialized office and laboratory facilities is lagging demand in several life sciences hubs nationwide.