Alexandria Real Estate Recaps Cambridge Life Science Asset

100 Binney St. Image courtesy of Newmark

Newmark has orchestrated the recapitalization of the trophy office and laboratory building at 100 Binney St. in Cambridge, Mass., the life science capital of the U.S. Alexandria Real Estate Equities sold a partial interest in the approximately 433,000-square-foot asset to a joint venture between an unidentified institutional investor and CBRE Investment Management.

Alexandria has been embracing recapitalizations of late. “We do our job to execute the business and do it as best we can to grow cash flows in a prudent way and fund it in a reasonable way with both debt equity as well as proceeds from dispositions,” Dean Shigenaga, CFO of Alexandria Real Estate Equities Inc., said during the company’s fourth quarter 2021 earnings call on February 1, 2022.

Located at Alexandria’s 11-acre Alexandria Center at Kendall Square life science campus, 100 Binney made its debut in 2018. Alexandria developed the 10-story tower with the assistance of an approximately $304 million construction loan from the Bank of China.

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The state-of-the-art destination is designed to accommodate mission-critical requirements for both office and lab users. In addition to Class A space, the property features a host of amenities, including 10,000 square feet of street-level retail space, covered bicycle parking and shower facilities. Additionally, 100 Binney is LEED Gold-certified and among the transit-oriented development’s sustainable features is a rooftop solar installation.

Before Alexandria was able to complete construction of 100 Binney, the company had already preleased the building in its entirety, with Bristol-Myers Squibb having been the first tenant to commit. Today, the property continues to be leased to maximum capacity. Meta Platforms Inc., rebranded parent company of Facebook et al, serves as co-anchor along with Bristol-Myers, and counts Sigilon Therapeutics, Tango Therapeutics and TCR2 Therapeutics as building neighbors.

Newmark’s Robert Griffin, Edward Maher, Matthew Pullen and Samantha Hallowell represented Alexandria in the sale transaction and secured the new joint venture partnership. James Tribble and William Sleeper, also of Newmark, provided additional support on the transaction.

Holding all the cards

Alexandria has not disclosed the financial details of the 100 Binney recapitalization. However, the property’s presence in Cambridge offers an indication of its value. “Cambridge, MA—with its existing cluster of life science companies; collaboration between business, academia and hospitals; the Massachusetts Institute of Technology, Harvard University and connection to the MBTA’s Red Line—has created an ecosystem that big pharma companies, startups and VCs can’t get enough of,” according to Colliers‘ first quarter 2022 life science report.

During the earnings call, Alexandria noted that sales via five recapitalizations in the fourth quarter of 2021 had yielded the company $1.97 billion in proceeds at a per square foot value of $1,497. Among the recapitalizations was the fully leased office and lab asset at 50 and 60 Binney in Alexandria Center at Kendall Square in Cambridge. With the assistance of Newmark, the company sold a 66 percent interest in the 532,300-square-foot, two-building property to Norges Bank Investment Management and MetLife Investment Management in a $1.2 billion transaction.

“High-quality life science assets with high-quality tenants are scarce, and we have hundreds of them,” Peter Moglia, co-CEO, said during the earnings call.