Alexandria Real Estate Equities, Inc. ARE announced a 15-year anchor lease with the biopharmaceutical company, Bristol-Myers Squibb BMY, for 208,000 rentable square feet (“RSF”) at 100 Binney Street, Alexandria Center, at Kendall Square in Cambridge, MA.
Bristol-Myers Squibb would set up a research and development center in the leased space that represents nearly half of the premium office/laboratory facility, comprising a total space of 431,500 RSF.
This anchor lease at Alexandria's ground-up development depicts solid demand for its properties. On the other hand, this project, slated to be delivered in fourth-quarter 2017, will likely offer solid scope to Bristol-Myers for leveraging the thriving life science community and talent hub in Cambridge.
In fact, concentration of several pharmaceutical and biotechnology companies amid presence of solid venture capital and acclaimed academic institutes that support collaboration and innovation, like Massachusetts Institute of Technology (“MIT”), have helped the Cambridge Kendall Square innovation cluster earned its reputation.
Specifically, the Alexandria Center at Kendall Square spans 11 acres with the urban campus having around 1.6 million RSF of high-quality office and laboratory space. Notably, Alexandria already boasts approximately 5.2 million RSF of laboratory and office space in the Greater Boston cluster, serving more than 100 life science and associated tenants in this region.
We believe the move would allow this Pasadena, CA-based Real Estate Investment Trust (“REIT”), which eyes collaborative science campuses in urban innovation clusters, to strengthen its top-line growth over the long term. The company has a diversified tenant base and reaps around 52% of total annualized base rent (as of Mar 31, 2015) from investment-grade clients, which is encouraging.
Currently, Alexandria Real Estate carries a Zacks Rank #3 (Hold). Investors interested in REITs may consider stocks like Hersha Hospitality Trust HT and Prologis, Inc. PLD. Both these stocks carry a Zacks Rank #2 (Buy).
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