2023-06-20 12:36:03 ET
Alexandria Real Estate Equities ( NYSE: ARE ), a REIT that focuses on life science mega campuses, completed the sale of five facilities in the greater Boston market for $365M.
The sale is part of the company's plan to raise capital by divesting non-core mon-mega campus properties. Including the recent sales, Alexandria ( ARE ) has completed or has signed letters of intent or agreements for pending transactions totaling $884M, or 58% of its 2023 capital plan targeting $1.525B of dispositions and sales of partial interests.
The sale of the five Boston area properties, totaling 428,663 rentable square feet, resulted in a gain on sale of $187.2M and a value-creation margin of 80%.
Proceeds from the disposition will be reinvested in Alexandria's pipeline, which consists of large-scale R&D centers for life science companies including Eli Lilly ( LLY ), Bristol Myers Squibb ( BMY ), and Moderna ( MRNA ).
As of March 31, 2023, 6.7M RSF of current and near-term value-creation projects that are 72% leased are expected to drive over $610M of annual incremental net operating income, primarily from Q2 2023 through Q1 2026, the company said. Alexandria ( ARE ) reiterates 2023 guidance of adjusted FFO growth of 6.4% at midpoint.
ARE shares dropped 1.6% in Tuesday midday trading during a session when all three major U.S. stock averages are in the red.
Alexandria's announcement comes after real estate investor Jonathan Litt issued a white paper last week that contends attendance at Alexandria's ( ARE ) office/lab buildings has dropped 50% when compared with prepandemic levels.
SA Investing Group Leader Brad Thomas looks at Alexandria Real Estate and debunks the 'Litt piece' and SA analyst Justin Purohit also challenges Litt's short thesis . Meanwhile, JR Research warns to prepare for more pain .
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Alexandria Research completes sale of five facilities, reiterates 2023 guidance