Alexandria Pens New Lease Deals - Analyst Blog


Pasadena, California-based real estate investment trust (REIT), Alexandria Real Estate Equities, Inc. ( ARE ) , recently entered into long-term agreements with four prestigious companies. The agreements are intended to pre-lease a total of 162,000 square feet at a property - 400 Technology Square - located in Cambridge, Massachusetts.

The 400 Technology square comprises of rentable space of around 194,776 square feet and is one of the seven facilities located at the company's state-of-the-art laboratory/office park-like community known as Alexandria Technology Square. The acquired property is currently in the final stage of redevelopment, which is expected to be completed later this year. Upon completion, the total square footage of the campus will be increased by around 18,000 square feet.

Alexandria Technology Square is located in the Kendall Square neighborhood of Cambridge and consists of seven buildings spanning 1.2 million square feet of office, lab and retail space. Strategically located adjacent to the Massachusetts Institute of Technology (MIT), and near the Broad Institute and the Whitehead Institute, the property is well connected to various residential areas, restaurants, shops, and conveniences.

The property is already occupied by leading life science and advanced technology companies such as - Novartis AG ( NVS ) , GlaxoSmithKline plc ( GSK ) , H3 Biomedicine Inc. and the Massachusetts Biotechnology Council. Following the lease agreements, the property will now have four more well- known firms as tenants. These include - The Ragon Institute of MGH, MIT and Harvard, Epizyme, Inc., Warp Drive Bio, LLC and Aramco Services Company.

Alexandria Real Estate primarily focuses on leasing properties situated in key cluster submarkets to top-notch organizations, mainly associated with the life science industry. The Greater Boston area which houses Cambridge is among Alexandria Real Estate's core operational markets cluster.

The company owns and operates approximately 3.7 million square feet of office and high-quality laboratory space in close proximity to world known academic and medical institutions. It has around 100 client tenants in the area including the likes of Abbott Laboratories ( ABT ) , Biogen Idec Inc. ( BIIB ) , Quest Diagnostics Inc. ( DGX ) , Thermo Fisher Scientific Inc. ( TMO ) and others.

Recently, Alexandria Real Estate leased a property located at another core operational market cluster - Suburban Washington D.C. The company inked a long-term lease deal with National Institutes of Health's (NIH) National Center for Advancing Translational Sciences (NCATS) for 75,000 square feet of space at Alexandria's Shady Grove Life Sciences Center in Maryland.

The company is expected to release its third-quarter 2012 results on October 29, 2012. The Zacks Consensus Estimate for third quarter FFO (fund from operations) is currently pegged at $1.08 per share.

We currently have a long-term Neutral recommendation on the stock. It also carries a short-term Zacks #3 Rank (Hold).

Note: FFO, a widely accepted and reported measure of the performance of REITs is derived by adding depreciation, amortization and other non-cash expenses to net income.

ABBOTT LABS (ABT): Free Stock Analysis Report
ALEXANDRIA REAL (ARE): Free Stock Analysis Report
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
QUEST DIAGNOSTC (DGX): Free Stock Analysis Report
GLAXOSMITHKLINE (GSK): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
THERMO FISHER (TMO): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ABT , ARE , BIIB , DGX , GSK

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