Alexandria Inks First Lease for 1818 Fairview Development
Alexandria Real Estate Equities Inc. ARE has bagged its first tenant at the 1818 Fairview development project — a four-story life-science office building located in the Lake Union submarket — per an article citing Jesse Ottele, Newmark Knight Frank’s real estate broker.
Vertical construction of the ground-up development project commenced during second-quarter 2018. This water-front building has been designed in a four-story atrium format, facing Lake Union. When construction completes in first-quarter 2019, the building will span 205,000 square feet of rentable space in Seattle’s Eastlake neighborhood.
The article also stated that two other leases are pending. The company’s latest quarterly filing states that it has leased 12% of total space (aggregating to nearly 25,000 square feet) at the Class A development to Bluebird Bio, based in Cambridge, MA, and negotiations are on for another 12% of space.
The company is receiving numerous proposals for the remaining space, from companies other than the biotech space.
Going forward, it is expected to enjoy robust leasing activity, given its strategic location in one of the most attractive life-science sub-markets in Seattle.
Importantly, the company has significant presence in the Union Lake submarket, with ownership in nine properties, including the 1818 Fairview project. Alexandria recently bought a six-story building at 701 Dexter Ave. N., while another development project at 1150 Eastlake Avenue, spanning 260,000 rentable square feet of space, will boast a two-level urban forest. Such densification efforts will fortify its presence in the area and enable Alexandria to command higher rents.
In fact, per a report by Jones Lang LaSalle JLL the average asking rate for lab space in the Lake Union submarket has climbed 24.1% year over year to $47.55.
Nonetheless, the company’s active development and redevelopment pipeline increases operational risks, and makes it vulnerable to rising construction costs and lease-up concerns.
Over the past year, shares of this Zacks #3 (Hold) Ranked company have gained 4.4% as against the industry’s decline of 0.1%.
Key Picks
Better-ranked stocks from the REIT space include W.P. Carey, Inc. WPC and PS Business Parks, Inc. PSB. Both companies carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
W.P. Carey’s FFO per share estimates for 2018 remined unchanged at $5.12 in 30 days’ time. Its shares have appreciated 7.3% in the past six months.
PS Business Parks’ FFO per share estimates for the current year moved up marginally in the past 30 days to $6.39. The stock has rallied 14.9% in six months’ time.
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