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Cluster of life science offices sell for $112 million

A Boston company bought a cluster of San Diego office buildings this week for $112 million, one of the biggest local real estate sales of the year.

The cluster of 12 buildings had been owned by San Diego-based Parallel Capital Partners, a real estate investment firm. The total area sold equals around 318,969 square feet of office space.

Boston-based Longfellow Real Estate Partners purchase of the buildings comes with 81 life science, technology and research tenants.

Some of the companies in the buildings include Pelagos Pharmaceuticals, MabVax Therapeutics, Renew Biopharma, Aethlon Medical, Drug Delivery Experts and Sirigen.

Matt Root, CEO of Parallel Capital, said the sale represented the continued transition of Sorrento Valley from a light industrial park into an innovative area for technology companies.

“We’re very happy. It was a great acquisition we made in 2012,” he said. “It also took a lot of hard work to implement and execute on our business plan.”

Parallel Capital began buying buildings included in the portfolio in 2012 for $63.4 million. Including the sale to Longfellow, and two other sales, the firm ended up selling the buildings for $85.8 million more than they paid.

However, the company did spend more than $10 million in renovations and upgrades before the sales.

Nathan Moeder, principal with real estate analysts London Moeder Advisors, said the rest of Sorrento Valley — with Qualcomm and other companies — has run out land for life science companies. So, it made sense that older properties, like those in the Longfellow sale, would be refurbished as an ideal place for new development.

Moeder said life science and technology companies partly want to be in Sorrento Valley because of image, wanting to be seen where their competitors are. But, it is also convenient.

“It’s address, but it’s also the ability to do business,” he said. “If you are part of the biotech industry support system, you are going to want to be a quick drive to meetings.”

Buildings included in the sale included 11772 Sorrento Valley Road, 11760 Sorrento Valley Road, 11750 Sorrento Valley Road, 11558-11588 Sorrento Valley Road, 11494 Sorrento Valley Road, and 11535-11585 Sorrento Valley Road. The buildings are a bit older, with some built in the 1970s.

Longfellow formed in 2009 and has offices in Boston, Durham, N.C. and Morrisville, N.C. It created a $500 million innovation fund this summer to invest in life science and technology real estate across the United States.

At the time, Jamie Peschel, managing partner of Longfellow, said in a press release, “Our confidence in life sciences real estate continues, given its compelling fundamentals and demonstrated growth. This fund will allow us to take advantage of opportunities in markets across the U.S. that are supporting innovation.”