PASADENA, Calif., July 13, 2018 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE), an urban office REIT uniquely focused on collaborative life science and technology campuses in AAA innovation cluster locations, today announced it has acquired 219 East 42nd Street for $203 million on a fee simple basis, through a membership interest in the purchasing entity 219/235 East LLC. As part of the transaction, 219/235 East LLC leased back 219 East 42nd Street on a triple net basis to Pfizer Inc., which announced earlier this year plans to relocate its global office headquarters to Manhattan's Hudson Yards neighborhood in 2022. Ideally located in the heart of Manhattan's East Side Medical Corridor with critical adjacency to New York City's renowned academic and medical institutions, the acquisition of this approximately 350,000 RSF, 10-story office building represents significant and immediate net operating income growth with a strong yield from an investment-grade tenant. Upon expiration of the lease, this highly sought-after asset will provide Alexandria with the opportunity to increase cash flows through conversion and redevelopment into office/laboratory space.
"Alexandria has been at the vanguard of catalyzing the evolution and growth of the New York City life science cluster for more than a decade," said Joel S. Marcus, executive chairman and founder of Alexandria Real Estate Equities, Inc. "In addition to developing New York City's premier life science campus at the Alexandria Center® for Life Science, we have brought together the city's brightest minds from biopharma and academia to drive biomedical innovation; helped recruit top talent to the cluster to lead early-stage companies; bolstered scientific collaborations by providing companies with access to our world-class life science network; and been a leading provider of early-stage venture capital investment to New York City's life science companies."
Alexandria was a critical first mover in the creation of the New York City life science cluster through the development of its world-class campus anchoring the city's East Side Medical Corridor. Since its opening in 2010, the Alexandria Center for Life Science has fostered collaboration and innovation for a diverse range of high-quality entities from multinational pharmaceutical companies, such as Pfizer Inc., Eli Lilly and Company and Roche, to early- and growth-stage companies, including Intra-Cellular Therapies, Inc., Kallyope Inc. and MeiraGTx Holdings plc, as well as Lodo Therapeutics Corporation and Petra Pharma Corporation, which were both launched by Accelerator Life Science Partners, a leading life science investment and management firm co-founded by Alexandria.
"The success of the Alexandria Center and the multidisciplinary efforts of our team have been instrumental in the growth of New York City's life science cluster," said John H. Cunningham, executive vice president and New York City regional market director at Alexandria Real Estate Equities, Inc. "We have worked diligently to attract entities from all over the world to NYC and to provide these companies with affordable, high-quality laboratory and office space; valuable networking to leaders from across the life science community; and sophisticated amenities to support the translation of their scientific discoveries into treatments and cures for patients. Our proposed transformation of 219 East 42nd Street into a life science center signifies a groundbreaking extension of Alexandria's unparalleled world-class franchise along Manhattan's East Side Medical Corridor and an exciting expansion opportunity for our campus community."
As of March 31, 2018, Alexandria's New York City asset base comprised a 728,000 RSF, two-building office/laboratory campus with a future development opportunity for an additional 420,000 RSF tower on site. The campus is 100% leased to innovative life science entities, with 70% of the region's annual rental revenue coming from investment-grade tenants.
About Alexandria Real Estate Equities, Inc.
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500® company, is an urban office REIT uniquely focused on collaborative life science and technology campuses in AAA innovation cluster locations, with a total market capitalization of $17.9 billion and an asset base in North America of 30.2 million SF as of March 31, 2018. The asset base in North America includes 20.8 million RSF of operating properties and 3.5 million RSF of development and redevelopment of new Class A properties currently undergoing construction and pre-construction activities with target delivery dates ranging from 2018 through 2020. Additionally, the asset base in North America includes 5.9 million SF of intermediate-term and future development projects, including 3.6 million SF of intermediate-term development projects. Founded in 1994, Alexandria pioneered this niche and has since established a significant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle Park. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science and technology campuses that provide its 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 and technology companies through its venture capital arm. 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 additional information, please visit www.are.com.
CONTACT: Sara Kabakoff, Senior Manager – Corporate Communications, Alexandria Real Estate Equities, Inc., (626) 788-5578
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SOURCE Alexandria Real Estate Equities, Inc.