Alexandria Real Estate Equities, Inc. (ARE - Free Report) recently launched a first-of-its-kind life-science consortium to accelerate advanced biological innovation and manufacturing in the Greater Boston region. The consortium consists of top-tier academic institutions, life-science industry partners and research hospitals situated in Massachusetts. As a founding member of the consortium, Alexandria will serve in the board of directors.
The innovative and collaborative center will work on the need for the development of important advanced technologies and address the robust demand for higher access to viral vector manufacturing production and next-generation cell. Further, it will offer a workforce development platform that will accelerate translation of emerging technologies into cost-effective and high-impact medicines aimed at preventing, treating and curing devastating diseases. This will improve patient lives and reduce the cost burden of diseases on society.
Per management, through this partnership, the company will use its expertise to improve human health and nutrition.
Notably, Alexandria has played a pivotal role in developing life-science cluster in the Greater Boston area. It has provided leading life science companies with highly effective, first-in-class infrastructure and strategic venture capital, thereby facilitating innovation, job growth and economic diversity in this significant cluster.
In fact, its asset base in Greater Boston spans more than 6.5 million rentable square feet (RSF) of office/laboratory space that is highly leased. This includes 5 million RSF in the Cambridge submarket.
Further, the company’s portfolio of Class A properties is concentrated in urban campuses, primarily for the life-science and technology entities. These locations are characterized by high barriers to entry and exit, and a limited supply of available space. This highly-dynamic setting adds to the productivity and efficiency of the tenants, which, in turn, ensures steady rental revenues for the company.
This has helped Alexandria excel in the recent quarters. In addition, solid external growth and strategic capital allocation to highly-leased value-creation pipeline are encouraging.
However, a significant development pipeline escalates operational risks and exposes it to rising construction costs. In fact, the company has 2.5 million RSF of Class A properties going through construction or pre-construction, with estimated initial occupancy in the fourth quarter of 2019 or 2020. The company also has 4.9 million RSF of intermediate-term Class A properties undergoing or nearing pre-construction.
Currently, Alexandria carries a Zacks Rank #3 (Hold). Over the past three months, shares of the company have rallied 9.4%, as against the industry’s loss of 2.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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