Alexandria, BioMed Dominate Life-Science REIT Landscape with More than $2 Billion in Active Development

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Reported by Annette Kreuger for Industrial Info Resources (Sugar Land, Texas)--In the not-so-distant past, the majority of real estate investment trust (REIT) activity was in the commercial arena, developing, constructing and managing real estate such as office buildings, apartments and hotels. The life-science industry's consistent need for complex manufacturing plants and elaborate research facilities has now fueled the development of a powerful, standalone REIT sector.

See chart below for active REIT projects tracked by Industrial Info.

Today, the superstars of the life science REITs are Alexandria Real Estate Equities (Pasadena, California) and BioMed Realty Trust (San Diego, California). The firms capitalized on changes in facility development in the life-science business. One of the biggest attractions of REITs are the financial flexibility they can provide.

Life-science companies have little interest in focusing on facilities, beyond acknowledging the need for them, with many choosing instead to "outsource" the entire process. Mirroring the industry itself, REIT activity is also making inroads into the higher-education sector.

Alexandria and BioMed both enjoy the cachet of being the "...either/or..." team to turn to when one of the life science majors are in need of new space. Onboard from the start, REITs work closely with company planners from conception through operation. The needs of major drug companies spur REITs, sometimes developing buildings with a specific client in mind long before a contract is on the table.

Currently, there are 26 active reported North American projects sourced out of Alexandria and BioMed that represent a potential $2.3 billion in construction investments. The projects include everything from a $600 million project under construction for Novartis in Cambridge, Massachusetts, to a $25 million planned speculative laboratory building in Rockville, Maryland.

Founded in 1994, Alexandria slightly edges out BioMed in terms of both revenue and rentable square feet (RSF). Alexandria's third-quarter 2014 financial stats showed revenue of $185.6 million, up $27.3 million, or 17.2%, compared to $158.3 million for third-quarter 2013. The company has 17.9 million RSF, as well as an additional 13.5 million RSF in future ground-up development projects. Alexandria reports 97.3% occupancy for its operating properties.

BioMed, launched a decade after Alexandria, in 2004, reported $168.9 million for third-quarter 2014, compared with approximately $159.2 million for the same period in 2013, an increase of 6.1%. The company has approximately 17.2 million RSF, with land supporting an estimated additional 7.4 million square feet of development potential. Biomed's operating properties report 92.6% occupancy.

300174805	$75,000,000	Detailed Design	SAN DIEGO DNA SEQUENCING MEDICAL DEVICE PLANT EXPANSION
300047525	$35,000,000	Project Scope	ROCKVILLE SPECULATIVE R&D LABORATORY BUILDING F ADDITION
21001619	$35,000,000	Owner Review of Issue	SEATTLE GRASSROOT SOUTH LAKE UNION GUNN 1165 EASTLAKE RESEARCH BUILDING
300159701	$75,000,000	Planning and Scheduling	RESEARCH TRIANGLE PARK G-R ALEXANDRIA CENTER FOR AG, SCIENCE & TECHNOLOGY RTP
300110799	$45,000,000	Construction	SOUTH SAN FRANCISCO CANCER R&D LABORATORY ADDITION
300178423	$10,000,000	Project Scope	SEATTLE TERRY LIFE SCIENCE LABORATORY ADDITION
300178400	$75,000,000	Permitting	SEATTLE GRASSROOT DEXTER LIFE SCIENCES RESEARCH BUILDING
300047425	$25,000,000	Project Justification	ROCKVILLE SPECULATIVE R&D LABORATORY BUILDING E ADDITION
300175720	$5,000,000	Construction	CAMBRIDGE RNAI-BASED R&D LABORATORY RENOVATION/UPFIT
300027491	$50,000,000	Owner Review of Issue	SEATTLE SOUTH LAKE UNION 1150 EASTLAKERESEARCH AND DEVELOPMENT BUILDING ADDITION
300104239	$175,000,000	Construction	CAMBRIDGE GRASSROOT KENDALL SQUARE 75/125 BINNEY LIFE SCIENCE COMPLEX
300174413	$10,500,000	Construction	WALTHAM SCHIZOPHRENIA & ALZHEIMERS THERAPIES R&D LABORATORY RENOVATION/ADDITION
300159795	$25,000,000	Construction	SAN FRANCISCO BIOPHARMACEUTICAL RESEARCH AND DEVELOPMENT LABORATORY ADDITION
35000946	$350,000,000	Construction	BOSTON GRASSROOT LONGWOOD CENTER LABORATORY BUILDING
300153880	$35,000,000	Construction	SAN FRANCISCO GENE SEQUENCING R&D LABORATORY ADDITION/RENOVATION
300079443	$38,000,000	Construction	BOSTON LONGWOOD CENTER CANCER RESEARCH BUILDING BUILD-OUT ADDITION
300115180	$100,000,000	Construction	TARRYTOWN MOUNT PLEASANT PHARMACEUTICAL R&D CAMPUS EXPANSION
300162143	$6,000,000	Owner Review of Issue	ARDSLEY NEUROLOGICAL THERAPEUTICS R&D LABORATORY EXPANSION
300067197	$60,000,000	Planning and Scheduling	SAN DIEGO CENTER FOR NOVEL THERAPEUTICS (CNT) ADDITION
300178631	$125,000,000	Project Scope	FOSTER CITY GRASSROOT BIOTECH RESEARCH CAMPUS
300049386	$20,000,000	Project Scope	GRAFTON SURGICAL INSTRUMENTS PLANT ADDITION PHASE II
300129476	$225,000,000	Owner Review of Issue	SOUTH SAN FRANCISCO GATEWAY BIOTECH CAMPUS REDEVELOPMENT PHASE I
300021498	$50,000,000	Construction	SEATTLE FAIRVIEW BIOMEDICAL RESEARCH BUILDING II ADDITION
35000899	$600,000,000	Construction	CAMBRIDGE VACCINE AND DIAGNOSTICS R&D CENTER EXPANSION
300104248	$40,000,000	Site Characterization	SOUTH SAN FRANCISCO SPECULATIVE R&D LABORATORY PHASE II
300104240	$40,000,000	Site Characterization	SOUTH SAN FRANCISCO SPECULATIVE R&D LABORATORY PHASE I

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