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Harrison Street acquires Van. Evolution Block biomed facility

The Evolution Block in Vancouver. (Courtesy Harrison Street)
The Harrison Street Canada Alternative Real Estate Fund has acquired its first Canadian life sciences asset, 78,000 square feet of the newly-constructed Evolution Block in Vancouver. (Courtesy Harrison Street)

The Harrison Street Canada Alternative Real Estate Fund has acquired its first Canadian life sciences asset, 78,000 square feet of the newly constructed Evolution Block in Vancouver.

Evolution Block is a four-storey combined commercial and office building at 1055 Vernon St., which was developed by Metro Vancouver-based PC Urban and Nicola Wealth Real Estate. Created as a strata project, the upper three floors involved in this transaction had been acquired by Precision Nanosystems (PNI) for its new global headquarters and manufacturing facility.

Financial details of the acquisition were not released by Harrison Street.

“We’re proud to invest in Evolution Block, which fosters innovation, collaboration and discovery for the life sciences and medical fields in Vancouver, one of the fastest growing life sciences ecosystems in Canada,” Jonathan Turnbull, Harrison Street’s Canadian head of transactions and business development, said in the announcement. “Further, Evolution Block supports the advancement of Canada’s vaccine manufacturing capabilities to protect the health and safety of Canadians for years to come.” 

Turnbull said the acquisition was off market, and facilitated by an existing relationship between Harrison Street and Nicola Wealth.

"We privately negotiated the transaction with the team from Nicola Wealth and their partner," Turnbull wrote in an email exchange with RENX. "We had purchased the South Calgary Health Center from Nicola Wealth in 2022 – nice, clean transaction that helped develop the relationship to make us a logical candidate for them to talk to regarding Evolution Block."

The Evolution Block facility

Evolution Block was completed in 2022 after the development partners acquired the 0.8-acre property for development. It was formerly the site of a single-storey warehouse.

The ground floor of Evolution Block houses a 29,000-square-foot vehicle collision centre which is not included in this transaction.

Evolution Block is adjacent to the Mount Pleasant area of Vancouver, which has emerged as a life sciences hub. Evolution Block and PNI’s facility support Canada’s national biomanufacturing strategy, created during the COVID-19 pandemic, to expand production capacity of critical medicines and vaccines.

“The Mount Pleasant and False Creek Flats areas have quickly become home to many large global biomedical firms, yet there remains a significant disparity between the large demand for new life sciences users and the assets available,” Turnbull said in the release.

“We are thrilled to capitalize on that growing market opportunity with today’s announcement and will continue to seek attractive market opportunities in the life sciences sector as we further our support of critical biotechnology and innovation.”

To date, the Canada Alternative Real Estate Fund has closed on approximately $1 billion of transactions since it was launched in 2021. The fund targets investments in seniors living, student housing, medical office, life sciences, storage and digital assets throughout Canada.

Harrison Street seeking additional investments

"The Fund has made health-care real estate an important component to our strategy from Day 1," Turnbull wrote in his email. "To date, we have invested in eight senior housing properties that offer care to our seniors community, twwo medical office properties that provide essential services to their local communities and now, our first life science property that will provide critical vaccine production capabilities within Canada to lower our country’s dependence on foreign vaccine manufacturing.

"We will continue to invest in health-care real estate as we believe that it fundamentally offers our investors non-market-correlated returns based on strong, underlying demographic-driven demand."

And despite uncertain economic conditions, Turnbull said Harrison Street has strong faith in its target sectors.

"We are still active in the market for high-quality assets," he wrote. "There is a great deal of uncertainty in the broad financial and real estate markets; however, in the demographics driven real estate sectors we are targeting, the volatility and risks in operations witnessed in other sectors such as office are not present.

"People are getting older and they need a high-quality bed with care . . . regardless of inflation and debt rates, people need (and deserve) those beds. Students need beds for their studies . . . again, regardless of inflation and other global macro conditions. Our sectors have proven historically to be recession and inflation resistant – so we are still looking for quality deals."

Harrison Street is a Chicago-based investment management firm exclusively focused on alternative real assets. It also has offices in New York, San Francisco, Tokyo, Toronto and Washington D.C.

Since inception in 2005, the firm has invested across senior housing, student housing, health-care delivery, life sciences and storage real estate as well as social and utility infrastructure. 

It has over 245 employees and approximately $55 billion in assets under management. Clients include a global institutional investor base in North America, Europe, Middle East, Asia and Latin America. 

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