Having recently completed the acquisition of an 8-acre waterfront site in San Diego, IQHQ Inc. will break ground on the initial phase of the $1.5 billion San Diego Research and Development District this week. The RaDD will be the first truly urban life sciences-centric waterfront campus in the city.
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The RaDD will sprout up on a scenic location spanning three city blocks at the 12-acre Manchester Pacific Gateway, an iconic mixed-use development site along the Pacific Ocean. IQHQ acquired the land from Manchester Financial Group in a transaction orchestrated by Cushman & Wakefield’s Capital Markets on behalf of the seller.
“The property was purchased off market though as word began to spread in the real estate industry that IQHQ had interest in the property, it is safe to say that many other life sciences developers also began to show interest in the site. However, by that point IQHQ already had the property under contract,” Rick Reeder, executive managing director with Cushman & Wakefield’s Capital Markets, told Commercial Property Executive. Cushman & Wakefield’s Brett Ward and Derek Hulse joined Reeder in brokering the transaction, while Michael Burton of Flock & Avoyer provided market advisory services. “IQHQ’s development expertise played a significant role in the success of this transaction by creatively working within the development guidelines to orient the site in a way that will appeal to the needs of today’s life sciences tenant,” Reeder added.
IQHQ has not disclosed specific design details for The RaDD; however, the project is entitled for office and lab square footage, as well as support retail space. The RaDD will transform San Diego’s waterfront and serve as a cornerstone of sorts for San Diego’s life sciences market, much like the Seaport District in Boston. “On the waterfront, with access to nearby talent and the only project on the first-ever San Diego public transit, The RaDD represents the first urban and scalable, work-live-play campus solution for employers,” Tracy Murphy, president, IQHQ Inc., told CPE.
Life sciences at the forefront
The RaDD will likely find a warm reception upon completion in the pandemic-era life sciences environment. San Diego holds the distinction of being the third-largest life sciences market in the U.S., with an inventory that totaled approximately 19.6 million square feet at the beginning of 2020, according to research from Cushman & Wakefield. The market had an overall vacancy rate of just 8.6 percent in the first quarter of 2020 and the call for Class A office and lab space is on the rise. “Demand has continued to increase in spite of, and to some degree even as result of the pandemic,” Reeder observed. As noted in a second quarter COVID-19 report by Cushman & Wakefield report, life sciences companies in San Diego continue to tour and search for space while adhering to social distancing guidelines, and the majority of pre-pandemic active negotiations are still tracking. Additionally, the market has seen new and expansion requirements come to the fore specifically as a consequence of the coronavirus. And the growing tech sector is adding further pressure on inventory by claiming space traditionally designated for life sciences users.
IQHQ expects to deliver the first phase of The RaDD to the hungry San Diego life sciences market by the summer of 2023. “The RaDD is good for everyone in San Diego,” Murphy said. “It will drive significant economic development and jobs for the local San Diego economy.”