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Alexandria Sells $301M Share Of South City Biotech Facility

Life sciences developer Alexandria Real Estate Equities sold a 70% interest in its 213 East Grand Ave. property in South San Francisco for $301M and retained control over the property's new joint venture, according to a statement in the company’s Q1 2021 financial and operating results.

Merck Research Laboratories building at 213 East Grand Ave. in South San Francisco

The nine-story, 294K SF life sciences building was developed by Alexandria for lab and office use by Merck & Co., which signed a lease for the building in 2016 prior to construction.

The building gained LEED Gold status with the latest certification issued in October 2019. Building features include a 300-seat auditorium, a conference facility, a health and fitness center, and full-service dining facilities, according to KPW Structural Engineers, which was the lead structural engineer for the project.

The partial interest sale for $1,429 per rentable SF represents capitalization rates at 4.5% and 4%, according to a statement. The deal occurred this month and is intended to generate capital for Alexandria’s development and redevelopment projects described as “our highly leased value-creation pipeline.”

"We are excited to partner with Alexandria on this new state-of-the-art research center located in the heart of the Bay Area's life science community," Merck Research Laboratories President Roger M. Perlmutter had said in a 2016 statement.

Alexandria has been a major player in the Bay Area’s bustling life sciences sector, especially in South San Francisco where it has built multiple biotech campuses, including one currently in the development pipeline at 751 Gateway Blvd.

The company’s Q1 2021 financial report reveals quarterly total revenue at $479.8M, for a 9.1% increase over Q1 2020. The report stated that Alexandria’s credit ratings are in the top 10% of all publicly traded REITs as of March 31.