Alexandria Real Estate Equities Completes Major Property Transaction

Alexandria Real Estate Equities' Strategic Sale Details

In a significant move, Alexandria Real Estate Equities, Inc. (NYSE: ARE), a leading real estate investment trust (REIT) focused on life sciences, has announced the completion of the sale of a prominent property. The transaction involved the sale of 1165 Eastlake Avenue East, a fully leased, Class A+ facility located in the thriving life science cluster known as Lake Union.

Details of the Property and Sale Transaction

The property, which boasts approximately 100,086 rentable square feet (RSF), was sold for an impressive $150 million. This sale reflects a capitalization rate of 4.9% based on cash net operating income for the second quarter of 2024, showcasing the property's strong financial performance. Alexandria developed this state-of-the-art life science facility and delivered it in 2021, solidifying its position as a premier developer in the sector.

Joint Venture with Fred Hutch Cancer Center

As part of the transaction, Alexandria entered into a strategic partnership with Fred Hutch Cancer Center, the long-standing tenant of the property. This joint venture affects additional properties at 1201 and 1208 Eastlake Avenue East, totaling approximately 206,031 RSF. Alexandria maintains a 30% ownership interest in these locations.

Commitment to the Life Science Sector

Fred Hutch has emphasized its commitment to expanding in South Lake Union, recently executing early lease renewals, including a 15-year extension for the entirety of the building at 1201 Eastlake. This decision aligns with Fred Hutch's mission to advance research and innovation in cancer treatment and contributes to the overall growth of the life science sector in Seattle.

Leadership Perspectives on the Sale

Thomas J. Lynch Jr., MD, president and director of Fred Hutch, expressed his appreciation for the transaction: "Every day matters to those facing critical health challenges. This agreement will allow us to expand our research efforts significantly and serve our mission effectively." Similarly, Hart Cole, executive vice president at Alexandria, highlighted the long-standing relationship with Fred Hutch and the importance of continued innovation within Seattle's life science market.

Reinvestment Strategy Following the Sale

The proceeds from the sale of 1165 Eastlake Avenue will be strategically reinvested into Alexandria's robust portfolio of development projects. This pipeline includes research and development centers for top-tier life science companies like Bristol Myers Squibb and Novo Nordisk. As of recently, Alexandria's ongoing construction encompasses 5.3 million RSF of Class A/A+ properties, which are expected to contribute around $480 million in net operating income by the first quarter of 2028.

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc., an S&P 500 company, has been at the forefront of the life sciences real estate sector since its inception in 1994. With a market capitalization of approximately $32.5 billion and a substantial asset base in North America, Alexandria specializes in creating environments that promote collaboration and innovation. The company fosters the growth of its tenants by providing high-quality facilities that enhance their ability to attract and retain elite talent in the dynamic life science industry.

Frequently Asked Questions

What is the significance of Alexandria's recent sale?

The sale of 1165 Eastlake emphasizes Alexandria's strategic approach to optimizing its real estate holdings within the life science sector.

Who was the buyer of the property at 1165 Eastlake?

The property was sold to Fred Hutch Cancer Center, allowing for continued collaboration and expansion within the life science community.

How will Alexandria use the proceeds from the sale?

Proceeds will be reinvested into Alexandria's development pipeline, targeting high-demand properties for leading life science firms.

What is Alexandria's mission?

Alexandria aims to create a lasting positive impact through the development of collaborative life science campuses, serving the needs of innovative companies.

What is the size of Alexandria's asset base?

As of June 30, 2024, Alexandria has a total market capitalization of $32.5 billion and an asset base comprised of 42.1 million RSF of operating properties.

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