Alexandria Seals Lease Deal with UCSF - Analyst Blog


Pasadena, Calif.-based Alexandria Real Estate Equities, Inc. ( ARE ) - major owner and leading life science real estate company -recently inked a 15-year lease deal with the University of California, San Francisco (UCSF). The lease is for approximately 30,000 rentable square feet of space at 499 Illinois Street, in Mission Bay, San Francisco .

In addition to this, the company has already achieved a long-term leased deal with Illumina Inc. ( ILMN ) at 499 Illinois Street for around 97,700 rentable square feet of laboratory/office space. Moreover, negotiations are underway for another approximately 55,400 rentable square feet. These bring the total leased or under negotiation percentage to 82% for this signature waterfront project.

As a matter of fact, there is a good demand for the residual space at 499 Illinois Street and the Mission Bay, largely driven by different segments in life science, translational clinical uses as well as the fast growing technology and digital health sectors.

The above-mentioned deal would facilitate UCSF to emerge as one of the key anchor client tenants at this property. The 15-yer lease deal also justifies the strong demand for the company's property and helps secure a steady rental source over the long term.

Alexandria currently has a solid foothold in the San Francisco Bay Area with around 3 million rentable square feet of space in Mission Bay, South San Francisco, and West Peninsula submarkets. Besides UCSF, the company boasts of approximately 30 client tenants in Mission Bay.

Alexandria also announced a 5% hike in its quarterly cash dividend rate recently, reflecting a dividend increase for the sixth consecutive quarter. This real estate investment trust (REIT) will now pay a dividend of 68 cents per share for third-quarter 2013, up 3 cents from the prior-quarter dividend. The increased dividend will be paid on Oct 15, 2013 to stockholders of record on Sep 30.

Alexandria currently has a Zacks Rank #3 (Hold). However, two other REITs that are performing well and deserve a look are CubeSmart ( CUBE ) and Highwoods Properties Inc. ( HIW ), both carrying a Zacks Rank #2 (Buy).

ALEXANDRIA REAL (ARE): Free Stock Analysis Report

CUBESMART (CUBE): Free Stock Analysis Report

HIGHWOODS PPTYS (HIW): Free Stock Analysis Report

ILLUMINA INC (ILMN): 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: ARE , CUBE , HIW , ILMN

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