DISCOVERY COLLECTION

DISCOVERY COLLECTION- A LIFE SCIENCES PORTFOLIO -

DISCOVERY COLLECTION- A LIFE SCIENCES PORTFOLIO -

nanotechnology biotechnology pharmaceuticals medical devices defense aerospace exploration biopharmaceuticals healthcare

WHERE TENANTS ARE CHANGING THE WORLD...

2 DISCOVERY COLLECTION

3JLL

DISCOVERY COLLECTION

Jones Lang LaSalle has been retained as the Exclusive Agent for Seller to extend qualified principals the opportunity to acquire a fee simple interest in the entire portfolio, subportfolios, or individual assets of the Discovery Collection (“Discovery” or the “Portfolio”). Heavily concentrated in San Diego’s fastest growing life sciences submarkets, Sorrento Mesa and Valley, the Portfolio of nine projects spans 13 buildings and totals 652K SF with a collective weighted average lease term of 3.9 years. Through the offering, investors are afforded the unique opportunity to participate in the largest pure life sciences portfolio to ever hit the market in San Diego.

With surging tenant demand and record setting investment in the sector, The Discovery Collection is positioned to capture the unprecedented momentum behind San Diego’s life sciences sector. At 99% leased, the Portfolio offers stable in-place income and substantial upside potential given below market rents across the nine projects. From short-term value add to longer term stabilized leases, the Portfolio’s diverse investment profile is a rare opportunity to acquire critical mass in the nation’s 3rd largest life sciences market.

THE OFFERING

Jones Lang LaSalle Americas, Inc. (“JLL”), real estate license #01223413


652,037 SQUARE FEET13 BUILDINGS

9 DISTINCT ASSETS1 UNIQUE PORTFOLIO

1 CITY3 SUBMARKETS

3.9 YR WALT99% OCCUPIED

PORTFOLIO OVERVIEWAddress Submarket Buildings SF Occupancy (1) Main Tenants WALT

3030 Bunker Hill St Mission Bay 1 105,364 94.4% 21 tenants (incubator) 1.9 yrs

6828 Nancy Ridge Dr Sorrento Mesa 1 42,138 100.0% Integrated DNA Tech & Irisys 7.2 yrs

5870 & 5880 Pacific Center Blvd Sorrento Mesa 2 66,745 100.0% Malin Space Science & Suneva 3.9 yrs

11404 & 11408 Sorrento Valley Rd Sorrento Valley 2 31,185 97.4% Halozyme 1.3 yrs

11388 Sorrento Valley Rd Sorrento Valley 1 35,940 100.0% Halozyme & Siemens 1.3 yrs

4215 Sorrento Valley Blvd Sorrento Valley 1 56,053 100.0% Precision Toxicology 1.8 yrs

9535 Waples St Sorrento Mesa 1 50,055 100.0% Codex DNA & Scripps 1.2 yrs

6114, 6118, 6154 Nancy Ridge Dr Sorrento Mesa 3 196,557 100.0% Arena Pharmaceuticals 5.7 yrs

6122, 6124, 6126 Nancy Ridge Dr Sorrento Mesa 1 68,000 100.0% Arena Pharmaceuticals 5.7 yrs

Total / Weighted Average 13 652,037 98.9% 3.9 yrs (1) Occupancy as of October 2021

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3030 Bunker Hill Street 6828 Nancy Ridge Drive

5870 & 5880 Pacific Center Blvd 11404 & 11408 Sorrento Valley Road

4215 Sorrento Valley Road


11388 Sorrento Valley Road 6114, 6118, 6154 Nancy Ridge Drive

9535 Waples Street 6122, 6124, 6126 Nancy Ridge Drive

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• At 652,037 sf across nine projects, the Discovery Collection presents motivated capital with a strategic and generational opportunity to enter the San Diego life sciences market at scale or meaningfully expand an exsiting presence.

• Life sciences portfolios of scale rarely come to market, especially in the highly sought-after Sorrento Mesa and Sorrento Valley submarkets.

• At 99% leased with a WALT of 3.9 years, the Discovery Collection offers investors stable in-place income and a roster of established tenants.

• The Portfolio offers an opportunity to purchase the buildings at a discount to replacement cost.

OPPORTUNITY TO SHIFT SAN DIEGO’S LIFE SCIENCES OWNERSHIP LANDSCAPE

• On a weighted average basis, Portfolio rents are approximately 30% below market, which creates a path for investors to increase value through an aggressive mark-to-market campaign.

• With 39% of leases expiring in less than two years, Discovery Collection is poised to capitalize on San Diego’s exceptional rental rate growth (22% YoY!).

PATH TO VALUE CREATION WITH MARK-TO-MARKET UPSIDE

$2.99

$4.26

IN-PLACE

+/-30

% differe

nce

WEIGHTED AVERAGE PORTFOLIO RENTS (NNN)

MA

RKET


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6122, 6124, 6126 Nancy Ridge Dr

6114 & 6118 Nancy Ridge Dr

6154 Nancy Ridge Dr

6828 Nancy Ridge Dr

9535 Waples Street 5870 & 5880 Pacific Center Blvd

N 3030 Bunker Hill St( 9 miles South )

SORRENTO MESA

UTC


11404 & 11408 Sorrento Valley Road

11388 Sorrento Valley Road4215 Sorrento Valley Blvd

6114 & 6118 Nancy Ridge Dr

N

3030 Bunker Hill St( 9 miles South )

UTCSORRENTO MESA

SORRENTO VALLEY

• 84% of Discovery’s rentable area is in Sorrento Mesa and Sorrento Valley, two of the most sought-after life sciences submarkets in country.

• Sorrento Mesa and Sorrento Valley have emerged as the epicenter of growth of the life sciences sector, with lab inventory increasing 37% and 15% since 2018, respectively. Key growth drivers include 3.6 million square feet of current tenant demand and all-time-low occupancy rates in Torrey Pines and UTC as tech and life sciences companies compete for space.

• Sorrento Mesa ranks #1 submarket in San Diego in venture capital funding through the first half of 2021 with over $1.7 billion raised, which is fueling additional company formation and tenant growth.

SAN DIEGO’S FASTEST GROWING INNOVATION HUBS

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SPECIALIZED LAB PORTFOLIO COMPOSITION • The Discovery Collection contains highly specialized

facilities throughout the offering with eight out of the nine projects containing tailored wet lab and other critical improvements, which leads to higher likelihood of tenant renewals.

• Specifications span ISO 5 & ISO 6 clean rooms, assay and testing kit assemblage rooms, elixir rooms, and vivariums, offering an array of irreplaceable in-place infrastructure to the diverse tenant base to accommodate a number of uses in the same base building.


AMPLE LIQUIDITY SUPPORTING LIFE SCIENCES COMPANIES • National venture capital financings in the life sciences sector totaled nearly $11.7 billion in

Q1 2021, a notable increase of 35% from the prior quarter and 68% from the first quarter of 2020.

• 2020 saw record venture capital funding in San Diego at $6.1 billion, with $3.7 billion invested in life sciences companies. 2021 is set to surpass 2020 with $5.4 billion raised through June - $2.8 billion going to life sciences.

• Three of the largest capital events in 2020 were received by San Diego life sciences companies. This momentum has continued into 2021, notably with the IPO of Torrey Pines based Prometheus Biosciences for $190M.

• As of December 2020, Government NIH grants have awarded $71M for Quidel Corp., $33M for Helix, and $15.4M for Mesa Biotech. Furthermore, Hologic was granted $119M from the U.S. Government to produce SARS-CoV-2 molecular tests. San Diego based Arcturus Therapeutics received $220 million from Singapore’s Economic Development Board (EDB) to begin clinical trials on humans for its COVID-19 vaccine.

$165 $161$250

$343$320

$295$126

$123$196

$198$168

$118

$368$438

$810

$442

$52

$502

$285

$532$366

$892

$514

$2,025

$1,538

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

Q1 2

015

Q2

2015

Q3

2015

Q4

2015

Q1 2

016

Q2

2016

Q3

2016

Q4

2016

Q1 2

017

Q2

2017

Q3

2017

Q4

2017

Q1 2

018

Q2

2018

Q3

2018

Q4

2018

Q1 2

019

Q2

2019

Q3

2019

Q4

2019

Q1 2

020

Q2

2020

Q3

2020

Q4

2020

Q1 2

021

FUND

ING

(IN M

ILLI

ONS)

$1,300

Q2

2021

HISTORICAL VENTURE CAPITAL FUNDINGSAN DIEGO LIFE SCIENCES SECTOR

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SAN DIEGO LIFE SCIENCES MARKETCORE CLUSTER

Carlsbad

Santee

Poway

Solana Beach

La Jolla

Sorrento Valley

Sorrento Mesa

Torrey Pines

UTC/ Campus Point

Del Mar

Rancho Santa Fe

0 1 2 3 4mi

San Marcos

Encinitas

Encinitas

CLUSTER LAB GROWTH 2018 – 2023(includes pipeline)

City % Growth Total Growth (SF)

Sorrento Mesa 37.0% 1,631,299

Torrey Pines 8.7% 515,000

UTC/Campus Point 6.6% 250,000

Sorrento Valley 14.7% 159,000

CLUSTER LAB STATS (Q2 2021)

Total Inventory 16,835,694 SF

Average Asking Rent $5.39 PSF NNN

Under Development 990,102 SF

Direct Availability 4.1%

SORRENTO VALLEYTotal Supply: 1.3M SF

Direct Availability: 14.3% Rent Range: $4.00 –

$5.00 NNNSORRENTO MESA

Total Supply: 5.7M SFDirect Availability: 8.2%

Rent Range: $4.05 – $5.75 NNN

TORREY PINESTotal Supply: 5.9M SFDirect Availability: 2.1%Rent Range: $5.00 –

$6.75 NNN

UTC/CAMPUS POINTTotal Supply: 3.9M SF

Direct Availability: 1.0% Rent Range : $5.75 –

$6.25 NNN


Carlsbad

Santee

Poway

Solana Beach

La Jolla

Sorrento Valley

Sorrento Mesa

Torrey Pines

UTC/ Campus Point

Del Mar

Rancho Santa Fe

0 1 2 3 4mi

San Marcos

Encinitas

Encinitas

STRONG LIFE SCIENCES MARKET FUNDAMENTALS

• In an environment where talent recruitment and retention is critical for innovation industries, Life Sciences tenants are targeting San Diego to capitalize on the highly skilled and educated workforce, which is sustained and grown through universities graduating more STEM graduates than any other region in the nation.

• The leasing momentum from the record-breaking 2020 has carried into the first half of 2021, with the market already producing 70 completed transactions accounting for 1.7M SF of leased space. This volume is more than 2.0x that of the first half of 2020 and 2.3x that of the trailing 5-year average.

• This robust leasing activity has led to a hyper-competitive market for available space resulting in a thin 4.3% of total availability - an 80bps decrease compared to the first quarter of 2021.

• Class A asking rates in Sorrento Mesa have increased to an average of $4.77 NNN PSF/month with a recent high watermark of $5.75 NNN PSF/month. Sorrento Valley is following closely behind at $4.63 NNN PSF/month. Rents for lab space in the core cluster have grown 22% during the past 12 months as activity charges along at record pace.

• As of Q2 2021 tenant demand is at an all time high at 3.6 million square feet among 45 companies. Demand includes a combination of local companies requiring additional space, the formation of new startup ventures, and national tenants looking to build a presence in San Diego.

LIFE SCIENCES MARKET AVAILABILITY - SAN DIEGO

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

O�ce Industrial

6.1 MSF of supply has been converted since 2002Office: 4.4 MSF (5.3% of inventory)

Industrial: 2.0 MSF (1.3% of inventory)

5.2 MSF of conversion 2015-2023

Projected

4.3%

4.1%0.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q2 2021

Total Availability Direct Availability Sublease Availability

HISTORICAL LAB CONVERSIONS - SAN DIEGO

DEMAND IS OUTPACING SUPPLY

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INVESTMENT ADVISORSNick PsyllosManaging Director+1 858 812 [email protected] RE License #00788060

Sach KirpalaniSenior Director+1 858 410 [email protected] CA RE License #01799500

Michael LeggettSenior Managing Director+1 415 276 [email protected] RE License #01056334

Kurt LuedtkeAssociate+1 858 812 [email protected] CA RE License #02114541

Bradley Whiting, CFAAnalyst+1 858 410 [email protected] CA RE License #02093770

Aldon ColeSenior Managing Director+1 858 812 [email protected] RE License #01457351

Patrick BurgerManaging Director+1 858 812 [email protected] RE License #01820848

DEBT & STRUCTURED FINANCE ADVISORS

MARKET LEASING ADVISORSGrant SchonemanSenior Managing Director+1 858 410 [email protected] CA RE License #01516695

Chad UrieSenior Managing Director+1 858 410 [email protected] RE License #01261962

Tim OlsonSenior Managing Director+1 858 410 [email protected] CA RE License #01364117

Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) has been engaged by the owner of the properties to market them for sale. Information concerning the properties described herein has been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser. JLL and owner disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. The Property may be withdrawn without notice. If the recipient of this information has signed a confidentiality agreement regarding this matter, this information is subject to the terms of that agreement. ©2021. Jones Lang LaSalle IP, Inc. All rights reserved.

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DISCOVERY COLLECTION