The property is located in Sorrento Mesa, one of the top life science submarkets within the United States.
Under the agreement, CLAR will convert the office property into a premier life sciences property at an estimated cost of US$40.0 million ($56.4 million).
The redeveloped property is slated to be completed in the 4Q2023. Said to measure 94,230 sq ft across two floors, the property will be a cutting-edge, high-performance and LEED Gold-certified life sciences building that exceeds the extensive requirements of today’s life science tenants. The energy-efficient building will come with solar panels as well.
According to CLAR, the conversion will enable the REIT to ascribe a higher base rent with an annual escalation of 3% and a net property income (NPI) yield of around 9% when completed.
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Crinetics Pharmaceuticals will also provide a triple-net lease commitment of 11.5 years with an option to extend two additional five-year terms.
“We are delighted to announce this partnership with Crinetics Pharmaceuticals. This initiative will have long-term benefits for both our companies,” says William Tay, CEO and executive director of the manager.
He also expressed his confidence that Crinetics’ new global headquarters at 6055 Lusk Boulevard will be a standout in the Sorrento Mesa area, featuring comprehensive cutting-edge office and laboratory facilities as well as LEED Gold certification.
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“We are confident that Crinetics’ new global headquarters at 6055 Lusk Boulevard will be a standout in the Sorrento Mesa area, featuring comprehensive cutting-edge office and laboratory facilities as well as LEED Gold certification,” he adds. “This venture will solidify and enlarge CapitaLand Ascendas REIT’s track record in the life sciences space and foster even more opportunities for us.”
Following the completion of the project, the proportion of the REIT’s life sciences properties is estimated to increase to $1.3 billion or about 8% of its assets under management (AUM) on a pro forma basis.
Units in CLAR closed 4 cents higher or 1.51% up at $2.69 on Sept 30.
