Alexandria Real Estate Equities, Inc. Closes Strategic Value-Harvesting Disposition of 1165 Eastlake Avenue East in the Lake Union Submarket of Seattle
PASADENA, Calif., Sept. 12, 2024 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE), the first, preeminent, longest-tenured and pioneering owner, operator and developer of collaborative mega campuses in AAA life science innovation cluster locations, today announced the completion of the sale, through an affiliate, of 1165 Eastlake Avenue East in its Lake Union submarket of Seattle to longstanding tenant Fred Hutch Cancer Center (Fred Hutch). The fully leased 100,086 RSF single-tenant Class A+ life science facility, which was developed by Alexandria and delivered in 2021, sold for $150.0 million at a strong capitalization rate of 4.9% (based upon cash net operating income for 2Q24 annualized).
As part of this transaction, Alexandria, through an affiliate, entered into a strategic joint venture partnership with Fred Hutch with respect to each of 1201 and 1208 Eastlake Avenue East, aggregating 206,031 RSF, through a transfer of partial interests from the prior joint venture partner to Fred Hutch. Alexandria's ownership interest in each of 1201 and 1208 Eastlake remains unchanged at 30%. Affirming Fred Hutch's commitment to South Lake Union, it also executed early renewals at both properties, including a 15-year lease extension at 1201 Eastlake, where it occupies the entire building. These two life science facilities support the preeminent cancer center in its critical efforts to translate cancer and infectious disease discoveries into treatments and cures that improve and save lives.
"We know that every day matters to those facing life-threatening illnesses," said Thomas J. Lynch Jr., MD, president and director of Fred Hutch. "This opportunity allows us to swiftly advance our research and expand our South Lake Union campus in the heart of Seattle's life science and biotech community. We appreciated the collaborative relationship with Alexandria as we explored and finalized this important agreement that will support our mission to prevent, treat and cure cancer and infectious disease."
"Alexandria has been at the forefront of cultivating a world-class life science cluster in Seattle since entering the region in 1996 through our acquisition and leaseback of the original Fred Hutch campus, which marked the beginning of our longstanding strategic relationship with Fred Hutch," said Hart Cole, executive vice president – capital markets/strategic operations and co-regional market director – Seattle of Alexandria. "Fred Hutch is an important innovation engine in the Seattle life science market, and we are pleased to enable their growth and deepen our relationship as they expand their South Lake Union campus within the Alexandria Center® for Life Science – Eastlake mega campus ecosystem."
Proceeds from the strategic disposition of 1165 Eastlake will be reinvested into Alexandria's highly leased development and redevelopment pipeline, which consists of research and development centers for top life science companies, including Bristol Myers Squibb and Novo Nordisk. As of June 30, 2024, 5.3 million RSF of Class A/A+ properties undergoing construction and one committed near-term project are expected to deliver incremental annual net operating income aggregating $480 million by 1Q28.
About Alexandria Real Estate Equities, Inc.
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche with our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator and developer of collaborative mega campuses in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle and New York City. As of June 30, 2024, Alexandria has a total market capitalization of $32.5 billion and an asset base in North America that includes 42.1 million RSF of operating properties and 5.3 million RSF of Class A/A+ properties undergoing construction and one committed near-term project expected to commence construction in the next two years. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity and success. Alexandria also provides strategic capital to transformative life science companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns and greater long-term asset value. For more information on Alexandria, please visit www.are.com.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding the effectiveness of Alexandria's strategic value harvesting and asset recycling program, the use of proceeds, and Alexandria's ability to monetize its investments and fund future growth opportunities. These forward-looking statements are based on Alexandria's present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by Alexandria's forward-looking statements as a result of a variety of factors, including, without limitation, the risks and uncertainties detailed in its filings with the Securities and Exchange Commission. All forward-looking statements are made as of the date of this press release, and Alexandria assumes no obligation to update this information. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in Alexandria's forward-looking statements, and risks and uncertainties to Alexandria's business in general, please refer to Alexandria's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q.
CONTACT: Joel S. Marcus, Executive Chairman & Founder, (626) 578-9693, jmarcus@are.com
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SOURCE Alexandria Real Estate Equities, Inc.
