By Jon Peterson
Pasadena, Calif.-based Alexandria Real Estate Equities is expanding its office building presence in the South Lake Union sub-market of Seattle with a new land acquisition while at the same time starting a new development project in the area.
The real estate investment trust paid $8.4 million or $44 per square foot to acquire a land parcel located at 1818 Fairview Avenue East, according to the buyer’s 2015 second quarter earnings report. Also during the quarter the company broke ground on the 287,806 square foot development project located at 400 Dexter Avenue North.
Alexandria acquired the land parcel for future development. The asset purchased is subject to a long-term ground lease. When completed, the project will have a total size of 188,490 square feet.
The real estate investment trust has already had some leasing activity on the 400 Dexter Avenue North project. It was stated in the second quarter earnings report that the project is now 31 percent leased with signed tenants and it has other 33 percent of the space is under negotiation. One of the tenants signed up for the project is Juno Therapeutics Inc. The initial occupancy for the project is planned for the first quarter of 2017, and the development will become stabilized sometime in 2018.
Alexandria has a significant presence in Seattle. The public REIT owns a total of 11 properties covering a little over 1 million square feet. One part of this is 746,260 square feet of operating properties. Over the past year the occupancy on this part of the portfolio has increased from 93.3 percent to 96 percent. It has one new development in the portfolio and that is the 400 Dexter Avenue North project.
The assets that Alexandria owns in Seattle are split in the South Lake Union and Elliott Bay sub-markets. This portfolio makes up for five percent of the company’s overall portfolio, which now totals 18.8 million square feet. Its other major markets on the West Coast are San Francisco and San Diego.