Alexandria Real Estate Equities Finalizes Major Disposition Deal

Alexandria Real Estate Equities Completes Key Asset Sale

Alexandria Real Estate Equities, Inc. (NYSE: ARE), a leader in the life science real estate sector, has recently completed an important strategic sale involving the property located at 1165 Eastlake Avenue East. The company, renowned for its role in developing collaborative mega campuses in innovation-rich environments, has sold this fully leased 100,086 square foot facility for a substantial $150 million.

Details of the Transaction

This significant transaction was completed with the long-term tenant, Fred Hutch Cancer Center. The building, developed and delivered by Alexandria in 2021, sold at a compelling capitalization rate of 4.9%, indicating strong financial performance based on its net operating income for the second quarter of 2024.

Strategic Joint Venture Partnership

As part of this asset sale, Alexandria established a strategic joint venture with Fred Hutch Cancer Center regarding two other properties located at 1201 and 1208 Eastlake Avenue East. This partnership includes a total of 206,031 RSF and strengthens their long-standing collaboration in advancing cancer research and treatment. Alexandria continues to hold a 30% ownership interest in these properties.

Commitment to the Life Science Sector

The early renewals executed by Fred Hutch at these properties, including a noteworthy 15-year lease extension at 1201 Eastlake, reaffirm both parties' dedication to the South Lake Union area. This commitment enhances the operational capacity of Fred Hutch as they strive to innovate in cancer and infectious disease treatments.

Reinvestment Strategy for Growth

Proceeds from the transaction will be strategically reinvested back into Alexandria’s robust development pipeline. This includes several ongoing construction projects that are expected to yield significant annual net operating income—an estimated total of $480 million by the first quarter of 2028 from 5.3 million square feet of Class A/A+ properties currently under development.

About Alexandria Real Estate Equities, Inc.

Founded in 1994, Alexandria Real Estate Equities, Inc. (NYSE: ARE) stands as a best-in-class REIT focused on life sciences, placing a strong emphasis on creating sustainable, collaborative environments for innovation. Their expansive portfolio spans major life science hubs across North America. With a market capitalization of $32.5 billion and 42.1 million RSF of operating properties, Alexandria is uniquely positioned to support its tenants in attracting top-tier talent and driving productivity.

Innovative Solutions for Life Science Companies

Alexandria offers more than just space; it provides a dynamic ecosystem for life science companies to flourish. By fostering collaboration and providing strategic capital through its venture platform, Alexandria enhances the potential for success among its tenants, reflecting its commitment to making a positive impact on health and innovation.

Frequently Asked Questions

What is the significance of the sale of 1165 Eastlake Avenue East?

The sale marks a strategic move that allows Alexandria to reinvest proceeds into future growth while strengthening its partnership with Fred Hutch Cancer Center.

Who was the buyer of the property?

Fred Hutch Cancer Center, a long-standing tenant, purchased the property as part of their ongoing commitment to cancer research and facility expansion.

What are Alexandria’s plans for the proceeds from this sale?

The proceeds will be reinvested into Alexandria's development pipeline, which includes several projects aimed at enhancing their portfolio in the life sciences sector.

How long has Alexandria been in the life science real estate market?

Alexandria has been a pioneer in the life science real estate market since its founding in 1994, continuously expanding its influence in major innovation hubs.

What is Alexandria’s business model?

Alexandria focuses on creating collaborative mega campuses that provide dynamic environments for life science companies, ensuring high-quality tenants and sustainable growth.

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