KKR has struck a $475 million joint venture deal for a stake in one of San Diego's largest life science campuses, betting on a market that has been battered by rising vacancies and falling rents. The investment targets Campus Point, a nearly 2-million-square-foot complex in the University Town Center submarket owned by Alexandria Real Estate Equities, with tenants including major pharmaceutical and research names.
According to investing.com, KKR acquired a 49% noncontrolling equity interest in Alexandria's Campus Point investment entity, which works out to roughly 28.5% indirect ownership in the underlying joint venture. Alexandria will keep running the show, continuing to oversee the property's operations and development while retaining control of the joint venture, the outlet reports. The deal was first detailed by Globest.
Campus Point's roster of tenants reads like a who's who of biotech and biomedical research: Novartis, Bristol Myers Squibb, Eli Lilly, Leidos and UC San Diego all occupy space there, with corporate and institutional tenants accounting for approximately 98% of rental revenue, per the same investing.com report. The fresh capital is earmarked for development, leasing and property enhancements at the campus, the report notes.
Alexandria Leans on Asset Sales to Shore Up Finances
The Campus Point deal is part of a broader pattern for Alexandria, which has turned to asset sales to bolster its balance sheet. As of October 26, the REIT had sold $717 million through its asset-recycling program, according to Bisnow. Those transactions came alongside a $638.5 million quarterly loss for the company, with declining rents and tenant projections pointing to further losses ahead, the outlet reports.
Notably, Bisnow's account of the Campus Point transaction describes it differently than other outlets — characterizing it as the sale of a 29% controlling interest in the campus for $475 million, rather than the 49% noncontrolling stake described elsewhere. The discrepancy between the two characterizations was not resolved in available reporting.
Alexandria expects the joint venture to distribute at least 5.5% of KKR's initial $475 million contribution in the first year and beyond, according to Commercial Observer. The publication also notes that Alexandria faces 1.4 million square feet of lease expirations in 2027, a looming challenge for the REIT even as it brings in fresh capital partners. Eastdil Secured Savills advised Alexandria on the financial side, Proskauer served as Alexandria's legal advisor, and Gibson Dunn represented KKR, per investing.com.
San Diego's Lab Space Glut Hasn't Scared Off Big Money
The KKR investment lands in a San Diego life science market still working through a significant supply overhang. Bisnow cites Savills data showing vacancy in the market at 27.6%, while the San Diego Union-Tribune reported lab vacancy at 31% in the first quarter of 2026, near an all-time high. Asking rents fell for the 15th consecutive quarter to $5.55 per square foot, and leasing volume dropped to just 223,000 square feet in the first quarter — nearly half the 2025 quarterly average of 450,000 square feet, the Union-Tribune reported.
By the second quarter, the picture had stabilized somewhat but hardly improved: Savills reported vacancy at 28.1%, down just 10 basis points from a year earlier, while available space actually grew from 8.9 million square feet to 9.4 million square feet over the same period. Yet the Union-Tribune notes that bigger biotech companies continue migrating into newly built Class A buildings in premier locations — a flight-to-quality dynamic that may help explain why investors like KKR are still willing to write nine-figure checks for a marquee campus like Campus Point.
That flight to quality has played out elsewhere in the region too. Torrey Heights in Del Mar Heights and the Alexandria Real Estate Tech Center in Sorrento Mesa both reached 100% occupancy in the first quarter, according to the Union-Tribune. Savills also reported that Pfizer opened a 230,000-square-foot oncology R&D center at Breakthrough Properties' Torrey Heights campus, bringing roughly 650 employees to the site, while Sterling Bay and Harrison Street secured $290 million in refinancing for the 525,000-square-foot Pacific Center in Sorrento Mesa, where Quantum-Si signed on as the project's first tenant, leasing the entire sixth floor.
