Home Commercial Alexandria to Build 217,000 SQFT Building as Replacement for Recently Purchased South...

Alexandria to Build 217,000 SQFT Building as Replacement for Recently Purchased South Lake Union Asset in Seattle

By Meghan Hall

Seattle’s life science market is another technology sector that is growing at a steady pace as a result of top-tier and local companies’ — such as the Allen Institute and UW Medicine — continued expansion and broad investment in the industry from research associations and foundations. Capitalizing on that momentum, developers of real estate assets for life science properties across Puget Sound have been opportunistic in growing their portfolios over the last decade, which is why Pasadena, Calif.-based Alexandria Real Estate is looking to vastly expand an existing asset it acquired in South Lake Union earlier this year; the company announced in its quarterly report earlier this week that it is looking to develop up to 217,000 square feet of office and lab space at 701 Dexter Ave. N. in Seattle.

Alexandria Real Estate bought the South Lake Union parcel from Unico Properties in July 2018 for $33.5 million, or approximately $571 per square foot. Currently, 701 Dexter is is a 58,681 square foot, six-story Class B office tower, which the company is proposing to demolish and redevelop with a ten-story building with three levels of below-grade parking.

The site is located within close proximity of Amazon’s global headquarters, Facebook’s Seattle headquarters and the Bill & Melinda Gates Foundation. The Fred Hutch Cancer Research Center is also nearby, as is around 1.4 million square of lab space that Alexandria already owns on the east side of Lake Union.

The greater Puget Sound life sciences market consistently ranks in the top ten nationally in VC and NIH funding, according to a 2018 report issued by Jones Lang LaSalle. According to CBRE’s 2018 Real Estate Market Outlook, Seattle is the fifth metro area in the nation by NIH funding, or close to $1 billion. The Raleigh-Durham and Boston/Cambridge metros, New York and San Francisco Bay Area all rank ahead of Seattle.

BioMed Realty, another top investor and developer in the life sciences real estate market in the country as well as the greater Puget Sound region, is also actively pursuing development in South Lake Union. The San Diego-based firm broke ground on its 14-story office and laboratory campus, to be called Dexter Yard, in February 2018. The development will offer approximately 515,000 square feet of office or life sciences laboratory space, along with 25,000 square feet of ground floor retail.

Alexandria Real Estate submitted the proposal for the 701 Dexter Ave. N. site just after it signed Cambridge-based immunotherapy firm BlueBird Bio for its 205,000 square foot Atrium property at 1818 Fairview Ave. E. in August 2018. BlueBird Bio is the first tenant signed to the four-story building, which is expected to open in 2019.

Alexandra Real Estate did not return The Registry’s request for comment.