Pasadena, California-based real estate investment trust (REIT), Alexandria Real Estate Equities, Inc. (ARE), recently inked a long-term lease agreement with National Institutes of Health's (NIH) National Center for Advancing Translational Sciences (NCATS) for 75,000 square feet. The lessee would occupy space at Alexandria's Shady Grove Life Sciences Center in Maryland. With the deal the facility is now 97% leased.
Shady Grove Life Sciences Center comprises of four buildings spanning 281,000 square feet and is Maryland’s debut research park developed solely for serving biotechnology and health care industries and other related institutions of higher education.
The park houses facilities such as healthcare, research and educational centers, and R & D. The property boasts world class biotech leaders including- EntreMed Inc. (ENMD), Johns Hopkins University, Institute for Bioscience and Biotechnology Research (IBBR), Center for Advanced Research in Biotechnology (CARB) and U.S. Food and Drug Administration (FDA).
NIH, a part of the U.S. Department of Health and Human Services (HHS), is the nation’s medical research agency aimed at improving health and saving lives. NIH is made up of 27 Institutes and Centers, each having a particular research agenda. NCATS is an initiative of NIH intended to improve the intensity of innovative methods and technologies for patients. The new leased space is to be used for the Division of Pre-Clinical Innovation at NCATS.
The new lease agreement has extended a long-term alliance between NIH and Alexandria Real Estate. Prior to the agreement, the NIH occupied a space spanning 60,000 square feet to house its NIH Chemical Genomics Center (NCGC) at the campus. Post-transaction, NIH owns approximately 135,000 square feet of space at the Shady Grove Life Science Center.
As a point of reference, the board of Maryland-National Capital Park and Planning Commission recently approved a preliminary plan granting approximately 231,000 square feet of additional space in Shady Grove Life Sciences Center. This brings the total developable area in the facility to around 512,000 square feet. The area extension provides an opportunity for Alexandria Real Estate to undertake further life science developments.
Alexandria Real Estate primarily focuses on leasing properties situated at key cluster submarkets to top-notch organizations associated with the life science industry. In the recently completed second-quarter 2012, the company recorded 44 leases for space spanning around 959,000 square feet, the fourth highest number of leasing activity registered since its inception.
Alexandria Real Estate, which competes with BioMed Realty Trust Inc. (BMR), currently has a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
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