Alexandria Recapitalizes Boston Life Science Project
This deal marks the largest single-building transaction of its kind in the U.S. so far this year.
15 Necco St. Image courtesy of Alexandria Real Estate Equities Inc.
An affiliate of Alexandria Real Estate Equities Inc., along with National Development, have transferred a partial interest in a life science development at 15 Necco St. in Boston to a U.S. affiliate of Mori Trust Co. Ltd., Alexandria announced on Wednesday, April 12.
In a separate announcement, Newmark, which arranged the transaction, described the recapitalization as both the largest single-building life science transaction in the U.S. so far this year and as Mori Trust’s first life science transaction in this country. Financials on the deal were not disclosed.
Alexandria stated that proceeds will be used to fund the development of the 345,995-rentable-square-foot Class A project, which is expected to deliver late this year.
READ ALSO: VC Investment in Life Science Sector Is Healthy, But Slowing
The facility, in the Seaport Innovation District submarket, will be occupied by Eli Lilly and Co.’s Lilly Institute for Genetic Medicine, which reportedly will leverage promising RNA- and DNA-based technologies.
The waterfront property, which overlooks Fort Point Channel and the Harborwalk, will feature a rooftop terrace, street-level retail space and alternative energy sources, including geothermal energy and on-site renewable electricity generation. The location offers convenient walkability to public transportation, as it’s just across the Summer Street Bridge from South Station, one of Boston’s primary multimodal transit hubs.
In addition, 15 Necco St. is targeting LEED Gold Core & Shell, Fitwel Life Science and WiredScore Platinum certifications.
Newmark co-head of U.S. Capital Markets Robert Griffin, Executive Vice Chairman Edward Maher, Vice Chairman Matthew Pullen and Managing Director Samantha Hallowell of the firm’s Boston Capital Markets Group and Newmark Vice Chairman Alex Foshay, divisional head of the firm’s International Capital Markets Group, represented the partial interest sellers and procured the buyer, Mori Trust Co. Ltd.’s U.S. subsidiary, MORI America LLC.
Newmark Senior Financial Analyst William Sleeper provided financial analysis support for the transaction.
Greater Boston’s life science market strong, but…
A March report from Cushman & Wakefield notes that Greater Boston’s dominance as a life science center continues to grow yet warns that more than 14.3 million square feet of space is in the development pipeline, of which about 40 percent is preleased.
The market is already tipping to favor tenants, the report states, with average vacancy across the metro at 9.9 percent.
Just since last summer, metro Boston has seen very substantial investments in its life science sector.
- Last August, BioMed Realty received $514 million in construction financing for the first phase of its 485,000-square-foot Assembly Innovation Park in Somerville, Mass.
- In September, a joint venture of CV Properties, Cannon Hill Capital Partners and L&B Realty Advisors landed $278 million in construction funding for Boynton Gateway, a 334,000-square-foot life science facility, also in Somerville
- And in October, Greatland Realty Partners and Rockwood Capital secured up to $150 million from The Royal Bank of Canada to redevelop and expand a 16-acre former Liberty Mutual office campus in Weston, Mass., into a 340,000-square-foot life science development, Riverside Labs.
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