Pfizer inks large deal for lab space at new Torrey View campus in San Diego

Pharmaceutical giant Pfizer has inked a deal to house its growing oncology business in a new, palatial San Diego estate overlooking the ocean.

The drugmaker recently signed a 15-year lease for 230,000 square feet of space at the Torrey View campus, currently under construction. The company will take over two of the project’s three research and development buildings to advance cancer treatments, developer Breakthrough Properties announced Friday in a news release.

“Breakthrough is proud to support the Pfizer Oncology team as they continue to discover and develop next-generation therapies,” Breakthrough Properties CEO Dan Belldegrun said in a statement. “Torrey View is an ideal campus for innovation, offering high-quality lab infrastructure as well as unparalleled amenities, expansive open space, and a community of like-minded innovators ranging from established pharmas to growing biotechs.”

Formed in 2019, Breakthrough Properties is a joint venture between real estate developer Tishman Speyer and biotech investor Bellco Capital.

The entity purchased the nearly 10-acre Torrey View project site at the corner of El Camino Real and Carmel Mountain Road for $34.5 million in 2020. The U.S. subsidiary of Japanese real estate company Mitsui Fudosan, the Investment Management Corporation of Ontario and the Second Swedish National Pension Fund also have equity stakes in the Torrey View project.

The previously empty lot affords views of the Los Peñasquitos Lagoon and the Pacific Ocean and sits directly opposite single-family homes. Some neighboring residents who objected to the project’s size initially sought to block the development.

The 520,000-square-foot campus at 11202 El Camino Real includes the three research buildings, underground parking and a 25,000-square-foot tenant clubhouse with two dining options, a 400-person conference center and an upscale gym with a pickleball court. The nearly completed facility was already 40 percent leased to medical technology firm Becton, Dickinson and Co., which is renting the largest of the three buildings.

Pfizer joins BD and other unnamed biotech upstarts at the complex, which is now fully leased ahead of its completion, Breakthrough Properties said.

“Tenants have increased space options available, and are clearly indicating their desire to be located in true Class A quality projects in prime locations and with experienced life science real estate operators,” Daniel D’Orazi, chief investment officer with Breakthrough Properties, told the Union-Tribune in an emailed statement. “Torrey View has benefited from this flight to quality as it offers a unique combination of best-in-class life science infrastructure and design flexibility, along with unmatched amenities, architecture and open space, to create a true flagship campus experience within the heart of the life science ecosystem in San Diego.”

The Pfizer lease marks an anomaly in a local life science real estate market that has cooled significantly since the early stages of the pandemic when there was a feverish demand for lab space.

The contract represents the largest new biotech lease in the county in more than a year, said Joshua Ohl, who is the senior director of market analytics for real estate tracker CoStar. It is also 2,300 percent greater than the average biotech deal size of 10,000 square feet of space over the past 14 months, according to CoStar data.

“It’s a good deal and hopefully creates a little momentum in the leasing market in the biotech sector, considering we haven’t seen a deal of that size since 2022,” Ohl said.

There is 5.7 million square feet of lab space under construction across the county, including Stockdale Capital Partner’s Campus at Horton project and IQHQ’s Research and Development District project in downtown San Diego. Around two-thirds of the in-development space, or 3.8 million square feet, is available for lease, according to CoStar data.

Pfizer, which employs 35,000 workers in the U.S. and 88,000 worldwide, said in December that it was going “all in” on the cancer drug business with its $43 billion purchase of Seagen Inc.

“For the first time, 2 million people in the U.S. are expected to be diagnosed with cancer this year. Globally, around 20 million people received a cancer diagnosis in 2022 alone. Approximately 10 million people around the world died from cancer in 2022, and just over 600,000 deaths are expected to occur in the U.S. this year,” Chris Boshoff, Pfizer’s chief oncology officer, told investors at the company’s oncology innovation day in February. “We believe advancing the global fight against cancer will have a tremendous impact on society. And that’s why so many companies in this industry are working towards delivering new breakthroughs for people with cancer. In fact, the oncology market is projected to increase to up to $500 billion by 2030.”

Pfizer already has a substantial presence in San Diego. It owns a five-building, 550,000-square-foot campus in Torrey Pines. Here scientists are predominantly focused on cancer and vaccine therapies, according to the company’s website.

The Torrey View lease appears to be an expansion of the firm’s local footprint, although the pharmaceutical company did not respond to a request for additional information on its future home.

The lab location is in the middle of San Diego’s biotech hub, which is clustered around the University of California San Diego. The lease shines a spotlight on the lack of interest to date from large life science firms in the downtown market.