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Alexandria Expands Presence in Boston With $81.1M Buyout

Zacks Equity Research

Alexandria Real Estate Equities, Inc. ARE recently joined forces with National Development — a real estate development firm — for the acquisition of 10 Necco St. parking garage for $81.1 million per an article. The transaction indicates Alexandria’s efforts to expand presence in Boston.

Notably, Alexandria has a significant portfolio in Cambridge, spanning 4.5 million square feet of space, and has also focused its development efforts in the region. Nonetheless, as Greater Boston’s life-science cluster is expanding beyond Cambridge, with developers expressing interests in the Fort Point neighborhood, the buyout is a strategic fit.

Going by the article that stated a Suffolk County deed, the deal closed on Mar 27. Further, the property has witnessed significant value appreciation as it was sold for $56 million in 2015.

In addition, the property is directly adjacent to General Electric’s GE canceled second phase of its global headquarters. The company has roped brokerage firm CBRE Group CBRE to sell the 2.7-acre parcel and developers interested in the site are eyeing it as a potential life-science development.

Additionally, the deal comes on the heels of Alexandria making progress with development plans for a laboratory and office building at 99 A St. in South Boston, along with Anchor Line Partners. 

Management believes the South Boston submarket to be an attractive location for the life-science development due to its proximity to the MBTA Red Line.

Banking on growth in the life-science real estate market, Alexandria is undertaking development and redevelopment projects to fortify portfolio in key locations. In fact, it has an active development and redevelopment pipeline with 3.9 million rentable square feet (RSF) of projects slated for delivery from 2019 through 2020. The delivery of these new Class A properties in AAA locations will likely boost the company’s operating performance.  

Over the past three months, shares of this Zacks Rank #2 (Buy) company have rallied 23.7% compared with the industry’s gain of 16.1%.


Other Stock to Consider

Investors can also consider another similarly-ranked stock in the REIT space like Boston Properties, Inc. BXP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Properties’ funds from operations (FFO) per share estimate for the ongoing year has been revised marginally north to $6.92 in 30 days’ time. Additionally, it has a long-term growth rate of 6.20%.

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