Illumina

About the buildings

Located in the heart of the coastal infill submarket of University Town Center in San Diego, California, the Class A property consists of almost 800,000 square feet spread across six state-of-the-art office, lab and accessory buildings on 44 acres. The property is 100% occupied by Illumina and is under a long-term lease agreement serving as their world headquarters. 

Investment rationale

The life sciences segment of the real estate market has been expanding in the US for over 20 years, and the COVID-19 pandemic has accelerated private and public funding in the life sciences, thus boosting real estate demand.  

Aging populations, rising healthcare spending and technology advancements have all led to growing demand from life sciences tenants, and these specialized properties support their research and production needs. This makes properly configured life sciences real estate different from other property types, including traditional offices.  

The acquisition of a partial interest in the Illumina world headquarters is part of a larger strategy by the LaSalle Property Fund’s Investment Management team to increase the fund’s exposure to the life sciences sector. When compared to traditional offices, life sciences real estate cash flows are more stable and have a better demand outlook. In addition to higher long-term net operating income growth, the sector has lower ongoing landlord capital expenditure needs, as most investment is reusable and there are high retention rates for tenants. 

Future plans

As part of the transaction agreement, the LaSalle Property Fund will participate with other campus co-owners to invest in potential future projects that will expand and densify undeveloped land located on the campus site.