In its latest string of real estate acquisitions, UCLA Health has purchased a $55 million life sciences property near El Segundo and may spend $90 million more on renovations to accommodate UCLA Health Sports Medicine Institute, according to a request for qualifications tenant improvement submittal posted in July by UCLA Capital Programs.
The building, located at 5210 Pacific Concourse Drive in South Bay’s Del Aire, is a 170,000-square-foot site that includes a partial lab build-out and surface parking. It was 43% leased to German-based technology company Siemens through October.
With Siemen’s lease officially expired, UCLA Health, which is governed by The Regents of the University of California, will occupy the building’s entirety, according to Newmark Group Inc., who represented the seller of the building, Karney Properties, in the sale.
“The sale of 5210 Pacific Concourse to UCLA is a win-win for (the) buyer and seller,” Kevin Shannon, Newmark’s co-head of U.S. Capital Markets, said in a statement. “The building provides UCLA with great life science bones – a steel frame, low-rise construction building with lab improvements of an oversized 9.2-acre site that provides long term optionality.”
Shannon worked alongside Newmark colleagues and vice chairs Ken White, Rob Hannan and Laura Stumm, as well as executive managing director Bill Bloodgood and director Hayden Clegg.
“The sale exemplifies a growing trend of owner-users capitalizing on pricing dislocation in the market,” Stumm added. “Karney executed a phenomenal renovation that attracted the buyer to this site, while maximizing cash flow from a long-term lease.”
The two-story building was originally constructed in 2002 and renovated in 2020. According to public records, UCLA plans to spend approximately $90 million undergoing tenant improvements to the space in order to accommodate UCLA Health Sports Medicine Institute, which may include an ambulatory surgery center, sterile processing, a medical clinic, advanced imaging, a clinical laboratory and a specialty pharmacy.
The El Segundo building is not the only purchase UCLA Health has made recently. Earlier this year, UCLA Health acquired the 260-bed West Hills Hospital and Medical Center from HCA Healthcare. The transaction, which was finalized in March, will help address hospital inpatient capacity needs, allowing UCLA to expand its reach, according to the health care provider. The building has since been renamed UCLA West Valley Medical Center.
“UCLA Health is focused on enhancing timely and equitable access to health care throughout greater Los Angeles, and this acquisition is an important milestone in our ongoing efforts,” Johnese Spisso, president of UCLA Health and chief executive of the UCLA Hospital System, said at the time of the acquisition. “We are pleased to welcome West Hills staff members as UCLA Health employees as we work together to serve the community.”
UCLA as a whole has been a very active player in the real estate game recently. Most notably, the university was in the limelight after acquiring the former Westside Pavilion Mall, set to become the UCLA Research Park, for $700 million in January. While funding also came from the state and other donors, its purchase marks the most expensive acquisition in UCLA’s history.
Other recent acquisitions include UCLA’s $80 million purchase of the former Marymount California University campus in 2022 and the historic Trust Building downtown, which the university bought for $40 million last year.
