PASADENA, Calif., May 24, 2023 /PRNewswire/ -- Alexandria Real Estate Equities, Inc. (NYSE: ARE), the first, preeminent, longest-tenured and pioneering owner, operator and developer of collaborative life science, agtech and advanced technology campuses in AAA innovation cluster locations, today announced the completion of the sale of 11119 North Torrey Pines Road in its San Diego cluster to DivcoWest, a DivCore Capital company. The fully leased 72,506 RSF single-tenant property sold for $86 million at an impressive capitalization rate of 4.6% (based upon cash net operating income for 1Q23 annualized), resulting in significant realized value for Alexandria. Alexandria purchased the property in 2007 as a fully occupied stand-alone building in its Torrey Pines submarket and successfully redeveloped it into a Class A laboratory facility. The sale is the latest example of the company's exceptional execution of its strategic value harvesting and asset recycling program, through which Alexandria capitalizes on the strong private market valuations by sourcing significant equity-type capital for reinvestment into its value-creation development and redevelopment projects. As of March 31, 2023, Alexandria's highly leased pipeline of 6.7 million RSF of current and near-term projects is expected to generate more than $610 million of annual incremental net operating income, primarily commencing from 2Q23 through 1Q26.
"11119 North Torrey Pines served us well for more than 15 years, but this stand-alone asset no longer fits with our focus on aggregating our highly sought-after mega campuses. The strategic disposition of this stabilized asset is a testament to our irreplaceable and dominant platform, which, coupled with the scarcity of high-quality life science real estate assets, continues to create strong demand for investment opportunities arising from our value harvesting and capital recycling strategies," said Peter M. Moglia, chief executive officer and co-chief investment officer at Alexandria Real Estate Equities, Inc. "This sale also underscores our ability to monetize our investments at significant profit margins, even in challenging times, and enables the funding of the next generation of Class A life science campus assets. It was a great outcome for us, and we are pleased to continue building a long-term relationship with DivcoWest."
Building off its strong execution of strategic dispositions and sales of partial interests, Alexandria is making excellent progress on its 2023 plan. The company is targeting $1.5 billion (midpoint of guidance) in dispositions and sales of partial interests this year, with approximately $865 million in transactions that have been completed or are subject to signed letters of intent or purchase and sales agreements as of April 24, 2023. These proceeds will serve as an important source of capital that eliminates Alexandria's need to issue common equity in 2023.
About Alexandria Real Estate Equities, Inc.
Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator and developer of collaborative life science, agtech and advanced technology campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland and Research Triangle. The trusted partner to over 850 tenants, Alexandria has a total market capitalization of $33.0 billion and an asset base in North America of 75.6 million SF as of March 31, 2023, which includes 41.9 million RSF of operating properties and 5.5 million RSF of Class A properties undergoing construction, 9.7 million RSF of near-term and intermediate-term development and redevelopment projects and 18.5 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A properties clustered in life science, agtech and advanced technology campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns and greater long-term asset value. For more information on Alexandria, please visit www.are.com.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding the effectiveness of Alexandria's strategic value harvesting and asset recycling program, supply and demand for real estate investment opportunities, Alexandria's ability to monetize its investments and fund future growth opportunities and Alexandria's progress on its 2023 plan. These forward-looking statements are based on Alexandria's present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by Alexandria's forward-looking statements as a result of a variety of factors, including, without limitation, the risks and uncertainties detailed in its filings with the Securities and Exchange Commission. All forward-looking statements are made as of the date of this press release, and Alexandria assumes no obligation to update this information. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in Alexandria's forward-looking statements, and risks and uncertainties to Alexandria's business in general, please refer to Alexandria's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q.
CONTACT: Sara Kabakoff, Vice President – Strategic Communications, (626) 788-5578, skabakoff@are.com
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