Life Science Real Estate Developer Lands $310 Million Construction Loan for Cambridge R&D Project

Life Science Real Estate Developer Lands $310 Million Construction Loan for Cambridge R&D Project April 29, 2016
By Alex Keown, Breaking News Staff

CAMBRDIGE, Mass. – Alexandria Real Estate Equities, Inc., a life science real estate developer, secured $310 million for new office development that will have Bristol-Myers Squibb as an anchor tenant, the Boston Business Journal reported this morning.

Alexandria secured the financing from the Bank of China for the development, the Journal said. The site will be part of the Alexandria Center at Kendall Square, an eight building campus in the heart of the busiest pharmaceutical hub in the U.S. Other tenants on the campus include bluebird bio and Sanofi Genzyme . The new facility is about 431,000 square feet. Bristol-Myers will take up about 208,000 square feet of the site, the Journal said. The New York-based company will use the facility as a research and development site.

Cambridge’s Kendall Square area, which makes up approximately one square mile, is packed with biotech representatives. In May, Indianapolis-based Eli Lilly and Company announced it will build a new drug delivery and device innovation center, the Lilly Cambridge Innovation Center, in Kendall Square. In April, Amgen (AMGN), headquartered in Thousand Oaks, Calif., announced it was going to expand its presence in its Cambridge facilities, as well as in South San Francisco, part of a 100-person staff expansion. In an earlier report, the Boston Business Journal reported the bulk of the Kendall Square properties are “100 percent leased,” following Boston Properties leasing an additional 50,000 square feet of space to Google, adding onto the Internet company’s already expansive 300,000 square feet of property. Boston Properties controls nearly 3 million square feet of space in Kendall Square.

Kendall Square properties lease is for about $70 per square foot, but the proximity to the research and development talent in the area is a bonus that must be factored into the bottom line. One of the reasons for the greater Boston area becoming such a major hub in the biotech and pharmaceutical industries is the plethora of research universities in the area. Boston also has one of the highest educated workforces in the nation. Not only are smaller companies calling the Boston area home, but many larger and established pharmaceutical companies, such as GlaxoSmithKline , Takeda Pharmaceuticals , Sanofi , Biogen Idec, Inc. and Novartis AG have presences in the city. The close proximity of so many pharmaceutical and university laboratories provides researchers and scientists easy access to clinical studies and building partnerships between companies.

But, the price of space in Kendall Square is coming at a premium, which is why some life science real estate developers are looking outside the Cambridge area for space for pharma companies. King Street Properties, which bills itself as the operator of the largest “privately-held portfolio of science-based real estate concentrated within the core science submarkets of Boston,” believes more and more companies will look at properties elsewhere, including nearby Lexington, Mass. King Street Properties recently plunked down $46 million on a new 91,000 square-foot structure in Lexington, banking that pharmaceutical companies seeking space in the Boston suburbs will look for cheaper accommodations outside the Kendall Square area.

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