Alexandria Offers Updates on US, Overseas Life Sciences Campus Projects
During a May 9 conference call with analysts that followed release of the real estate investment trust’s first-quarter results, Alexandria Real Estate Equities offered a series of updates on lease deals and construction projects in progress throughout the US and overseas:
- San Francisco — Alexandria has signed a 50,000-square-foot lease with an undisclosed “institutional tenant” for the 158,000-square-foot 1500 Owens St., the second building to be constructed within its Mission Bay expanse. Company president Jim Richardson said Alexandria has “really strong active interest on the remainder of the building,” the steel structure of which was recently erected, and has boosted occupancy at Mission Bay’s first building, 1700 Owens St., to 95 percent leased and/or committed.
Also, the company has a letter of intent signed for about 100,000 square feet comprising one of two buildings of that size set to rise at 455 Mission Bay Blvd. South, a twin-building development within Alexandria’s “Mission Bay North” campus. The city of San Francisco has set a May 22 deadline for bids by contractors seeking to build the building shell and site improvements, valued at a total $35 million. For more information and contacts, click here.
- East Bay — Alexandria completed its sell-off of five properties in Alameda, Calif., totaling 272,730 rentable square feet for about $170 per square foot or about $46.4 million. “These are not Class A buildings. They’re probably Class B buildings. And they are dated buildings as well,” Chairman and CEO Joel Marcus said. Alexandria said it sold off the buildings to avoid exposure to the scheduled rollover of several near-term leases: “I think in light of the credit market situation, I think we did pretty well there,” Richardson said.
- South San Francisco — The REIT said it signed a 65,000-square-foot lease with an undisclosed tenant for the 135,000-square-foot 249 East Grand Ave., with an option to expand into the rest of the space. And within the two-building, 162,000-square-foot Alexandria Technology Center on East Jamie Court, Marcus said, “we’re working on several transactions and will have more to report next quarter.”
- San Diego — The REIT sold off an 86,962-square-foot building for about $23.3 million.
- Seattle — Alexandria raised the density of its potential development pipeline from 595,000 to 843,000 square feet, based on what CFO Dean Shigenaga called “a very thorough review that went over probably six months.” Also, a 115,000-square-foot building under construction within its East Lake cluster, in the city’s South Lake Union section, has been fully committed to a tenant that has signed a letter of intent to rent the space, “and [we] are negotiating a lease with a single tenant for the entire building,” Richardson said.
- New York — Marcus said Alexandria expects “shortly” to sign a lease for 30,000 to 40,000 square feet, roughly a floor and a half, with an undisclosed European biopharma firm at the 300,000-square-foot East Tower within East River Science Park, part of the eventual 1.2 million square feet planned for the campus. The East Tower is under construction and set for completion in the first half of 2010. The REIT is “working on” less formal letters of intent as well as formal requests for proposals for more than 400,000 square feet within the campus. In addition, the company is “at the term sheet stage,” close to finalizing a deal with a joint venture partner to take a minority stake in the project.
- China — Marcus said Alexandria is assembling its leasing team to find tenants for its first project there, a two-building 280,000-square-foot campus near Macau.
- Tenant base — Marcus said public biotechs account for a 30 percent share of the tenant base, followed by big pharma with about 20 percent, product and service companies with 15 to 20 percent, institutions with 15 percent, and private biotech companies with 12 percent.
HRPT Properties Trust Adds Biotech Lab Space to its Portfolio
Senior Housing Properties Trust, a publicly traded real estate investment trust based in Newton, Mass., has acquired an unspecified amount of biotechnology laboratory space as part of its $565 million acquisition of 48 medical office, clinic, and biotech lab buildings totaling nearly 2.2 million square feet from HRPT Properties Trust, a publicly-traded REIT also based in Newton.
HRPT did not detail the individual buildings to be sold, or their square footages, in announcing the sale. But the REIT did say the properties stretch across 12 states, with a combined 370 tenants and average occupancy rate of 98.3 percent.
The acquired properties raise to 23 percent the share of SHPT’s portfolio devoted to medical office, clinic, and biotech lab buildings. The company had no such buildings previously because of a 1999 agreement signed when SHP spun off from HRPT; it was previously a subsidiary. The original accord barred SHPT from competing from HRPT to acquire medical buildings, but has since been amended.
“As a result, [SHPT] may be able to take advantage of current favorable market conditions to purchase similar buildings at attractive valuations and to further diversify the company's portfolio of properties,” SHPT said in its announcement of the deal.
The sale is expected to be completed within 12 months.
ChemGen Purchases Terre Haute, Ind., Fermentation Facility; 20 New Jobs Planned
Maryland-based ChemGen has acquired the former Alpharma fermentation facility in Terre Haute, Ind., and has begun renovations to the 67,000 square-foot facility at 1445 South 1st St., allowing it to manufacture its best-known product, Hemicell, and other new enzymes for use in animal feed.
The company says about 20 engineering, production, and administrative jobs will be created at the plant within two years, with the potential to add another 10 or more positions. ChemGen said the average annual salary for the new jobs to be created will exceed $50,000 per year.
ChemGen already has hired its first employee and is considering several other candidates, company president Bernie Treidl told the Tribune-Star of Terre Haute.
The acquisition was welcomed by the public-private Terre Haute Economic Development Corp., which had sought a buyer for the plant for several years, and worked with ChemGen for more than a year. The plant was built in 1990 by Pitman-Moore to produce a genetically engineered pig growth hormone. But the hormone was never approved by the US Food and Drug Administration, and the plant later got sold to Alpharma. It too envisioned producing a pig hormone at the plant, but never ramped up the facility to full-scale production.
Headquartered in Gaithersburg, Md., ChemGen is a privately held biotechnology company that specializes in the development of products through the use of microbial fermentation technology. Hemicell is sold worldwide for use in poultry, swine, and other animal feed. The company was founded in 1985.
ZymoGenetics Discloses Plan to Sell Vacant Lot Near Eastlake, Seattle HQ
ZymoGenetics has disclosed in a regulatory filing its intent to sell a vacant lot near its headquarters in Seattle’s Eastlake section by year’s end. The 0.3-acre lot at 1150 Eastlake Ave. East was previously set aside for future expansion, and has a carrying cost of $4.5 million, according to a filing with the US Securities and Exchange Commission.
The property is ZymoGenetics’ only remaining land asset, and was purchased by the company in 2001 for $1.4 million, according to King County Assessor records cited by the Seattle Times.
"We're not in the real-estate business," ZymoGenetics spokeswoman Susan Specht told the Times, adding that a deal to sell the land is "still in negotiation, not settled.”
In 2002, ZymoGenetics sold its headquarters, a renovated historic power plant near Lake Union, for $52 million. The company now leases the building.
LAB Research Borrows $21M to Finance Canadian Expansion
LAB Research said last week it executed an agreement with a Canadian bank for a $21.1 million loan to finance its Canadian expansion. The loan consists of a $13.7 million mortgage with a 16-year term and a $7.4 million loan to finance equipment, repayable over 11 years. No capital repayments are required before March 2009.
The contract research organization is undertaking a $24 million expansion of its Canadian site in Laval, Quebec, from 87,000 to 170,000 square feet. LAB Research said it will also spend another $16 million over the next two years for additional equipment “aimed at maximizing the site's revenue capacity,” the company said in its first-quarter results press release. Once completed and fully equipped, the new expansion site should provide a potential threefold increase in the revenue-generating capacity, LAB Research added.
MIT Acquires Four Buildings, Two Parking Lots in Cambridge, Mass., for $90.5M
Massachusetts Institute of Technology has acquired four buildings with a total 148,000 square feet of laboratory space, plus two parking lots, in the Cambridgeport section of Cambridge, Mass., for a combined $90.5 million. The buildings and parking lots are located at Albany, Sidney, and Erie streets, near Central Square and University Park at MIT, a master-planned campus in which MIT has an ownership stake.
The buildings are 100 percent leased to and occupied by various biotech companies, John McQuaid, an official in the real estate division of the MIT Investment Management Company, told the Harvard Crimson. “There [are] various different tenants in there, and we don’t foresee any major changes in how they’re being used,” McQuaid added.
MIT acquired the property from members of the Stimpson family, whose predecessors constructed many of the buildings in the 1920s for their Stimpson Terminal Company.
Lisa Campoli, the Stimpson family’s sales agent and investment sales chief for the commercial real estate brokerage Colliers Meredith and Grew, told Globest.com MIT paid $30 million for 185-187 Albany St., another $26 million for 195 Albany St., almost $19.1 million for 57 Erie St. and 149 Sidney St., another $11.4 million for 148 Sidney St., and $4 million for 207 Albany St.
The Erie Street property is a parking lot, as is 207 Albany. 148 Sidney St. is leased to Cubist Pharmaceuticals, while 149 Sidney St. is leased to Acceleron Pharmaceuticals. MIT currently occupies 185 Albany St., while 195 Albany St. is leased to Shire Pharmaceuticals and subleased to Altus Pharmaceuticals.
Agilent Expanding Capacity, Workforce at Pharma Ingredients Plant in Boulder, Colo.
Agilent Technologies said May 7 it will expand its workforce at its nucleic acid active pharmaceutical ingredient manufacturing plant in Boulder, Colo., by merging it with the nucleic acid medicine operations it recently acquired from Dowpharma, a San Diego-based unit of Dow Chemical.
Agilent plans to add large-scale nucleic acid synthesis, purification, and drying capacity to its 35,000-square-foot Nucleic Acids Solutions facility at 5555 Airport Blvd., a project set to be completed by the end of 2008.
The Boulder plant manufactures short synthetic DNA and RNA molecules used as components of drugs for use in clinical trials. Agilent will increase plant capacity by adding a 200-1,000 mmole synthesizer capable of producing kilo quantities of API per synthesis batch, as well as a 30-liter-per-minute chromatography system and two multikilo lyophilization units. Infrastructure and reaction vessels will be added for custom conjugation chemistries and “duplex annealing” heat treatment of siRNAs, a project aimed at addressing the fastest growth segment of the oligonucleotide market.
Agilent will base 10 additional employees at the 35,000-square-foot facility on a contract basis, and another 20 employees over the next 12 months, spokesman Stuart Matlow told the Boulder County Business Report. The expansion is the second for the Boulder, Colo., facility since Agilent bought it in 2006 as part of its acquisition of locally-based SynPro.