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Pasadena Company Announces $725 Million Real Estate Buy

Published on Monday, July 18, 2016 | 4:21 pm

Alexandria Real Estate Equities, which just announced plans to expand its Pasadena headquarters, has announced in a separate move it is buying the 644,000-square-foot One Kendall Square tech campus in Cambridge for $725 million, a report on Boston-based newspaper Banker and Tradesman said Monday.

Alexandria is buying the property from DivcoWest, which paid $394 million for the seven-building complex just two years ago, the paper said.

Banker and Tradesman said the eight-acre complex is currently 98 percent leased to approximately 50 office, lab and retail tenants, although more than half of the leases are expiring through 2019. Current in-place rents average $47 per square foot, according to an SEC filing. In Cambridge, lab space is renting for close to $90 per square foot.

The newspaper said Alexandria also sees upside by converting office space into labs, which fetch higher rents. Currently, the complex contains 48 percent office space, 36 percent lab space and 16 percent retail.

Alexandria has also announced plans to move ahead with a 172,500-square-foot office and lab building at 399 Binney St., according to the Banker and Tradesman report. The project includes a new pedestrian plaza and redesigns to the 1,530-space Kendall Square parking garage entrances.

Alexandria will assume $203 million in existing debt as part of the acquisition, with an interest rate of 4.8 percent and a maturity date of February 2024. It’s also announced an offering of 6.5 million shares of common stock to finance the acquisition.

Alexandria already owns 5.6 million square feet of commercial real estate in Cambridge. It just completed the 380,000-square-foot 75-125 Binney St. complex which is leased to IBM Watson and Ariad Pharmaceuticals.

The company’s development pipeline also includes the one million-square-foot Alexandria Center at Kendall Square at 50-60 and 100 Binney St. Sanofi Genzyme is moving to a new 274,734-square-foot headquarters at 50 Binney St. in 2018, while bluebird bio has leased 255,743 square feet at 60 Binney St.

Bristol-Myers Squibb Co. has leased 400,000 square feet at 100 Binney St. for a new research facility that will open in early 2018, replacing sites in Wallingford, Connecticut and Waltham.

Alexandria Real Estate Equities, Inc. is an urban office REIT (real estate investment trust) that focuses on world-class collaborative science and technology campuses in AAA innovation cluster locations, with a total market capitalization of $11.1 billion and an asset base in North America of 24.5 million square feet as of March 31, 2016. The asset base in North America includes 18.9 million rentable square feet of operating properties and development and redevelopment projects, and 5.6 million square feet of future ground-up development projects.

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