Sterling Bay, Harrison Street Land $290M for San Diego Asset
The campus is in the metro’s largest life science submarket.
Sterling Bay and Harrison Street have secured a $290 million refinancing package for Pacific Center, a 525,000-square-foot, Class A life science property in San Diego. Peregren Capital Group issued the funds in a deal brokered by Newmark.
The capital includes $162.5 million of future funding, providing carry reserves and supporting the property through lease-up during a time when the life science sector faces vacancy challenges following a construction glut.
Pacific Center came online in 2025, but faced difficulties in sealing leasing deals, as reported by Bisnow. Bank OZK, the entity that funded the project with a $265 million construction loan in 2023, sold the debt earlier this year to Strategic Value Partners. That marked one of the largest whole-loan dispositions in Bank OZK’s history.
LISTEN TO: Life Science Real Estate in Transition
The LEED Gold-certified campus consists of two six-story lab and office buildings featuring floorplates ranging between 36,000 and 55,000 square feet, as well as a separate amenity center and parking structure.
Located at 9925 and 9955 Pacific Heights Blvd., Pacific Center is within San Diego’s Sorrento Mesa submarket, the metro’s largest by life science inventory, according to a Newmark report. The downtown area is roughly 15 miles south, while interstates 5 and 805 run less than 3 miles away.
Newmark Co-President Jonathan Firestone, together with Vice Chairman Blake Thompson and Director Jack Condon, negotiated the debt acquisition.
San Diego posts record high life science vacancy
San Diego, a prime life science hub, did not emerge unscathed from the slowdown, with the market recording a 26.6 percent vacancy rate as of March, up 560 basis points year-over-year, the same Newmark report shows. That’s the highest figure registered in two decades.
The spike in vacancy can be attributed to a large influx of new speculative projects, which clocked in at 2.4 million square feet in 2025. Last year, San Diego’s life science inventory grew by 10.8 percent, the largest increase in the market’s history. This is mostly in line with other large life science hubs, such as Boston or the Bay Area.
However, San Diego has also shown early signs of recovery this year. During the first quarter, 316,000 square feet of life science space was leased, above last year’s volume of roughly 200,000 square feet for the same time span, and on par with prepandemic averages.
You must be logged in to post a comment.