Deal Adds 1.6-Million-Sq-Ft Portfolio, Expands Reach At Key University, Research Institutions
BioMed Realty Trust (NYSE: BMR
) agreed to pay $640 million to buy the Baltimore-based subsidiary of privately owned Wexford Equities in a transaction that would add 1.62 million square feet to BioMed's life science portfolio and nearly $90 million for projects currently under development.
San Diego-based BioMed Realty announced plans to sell 15 million shares priced at $21.40 and raise about $321 million toward the purchase price for Wexford Science & Technology, LLC, a real estate investment and development company specializing in life science space for academic and medical research organizations.
The $640 million consideration excludes transaction costs and may be adjusted to reflect construction and development costs before the deal closes, whihc is expected in the third quarter of 2013. Wexford Science & Technology will operate as a wholly owned subsidiary of BioMed Realty.
BioMed Realty Chairman and CEO Alan D. Gold said the purchase will expand the REIT's ownership of property in the university markets and add "high-quality assets, credit tenants and long-term leases," he noted.
Of the purchase price, about $551 million is for Wexford's operating portfolio of about 1.6 million rentable square feet of research facilities in high-barrier-to-entry submarkets located on or near to leading academic, medical system and research campuses.
Wexford's 11-property operating portfolio includes 252,000 square feet at the University of Miami Life Science & Technology Park in Miami, FL, and more than 300,000 square feet of lab and research space at the University of Maryland in Baltimore.
All Wexford properties in the transaction include the following:
|PROPERTY||MARKET||MAIN TENANT||RENTABLE SF|
|Univ. of Maryland I||Baltimore, MD||Univ of Maryland||76,500|
|Univ. of Maryland II||Baltimore, MD||Univ of Maryland||235,000|
3711 Market BioPark I
|Philadelphia, PA||Univ City Science Ctr||80,900|
|Hershey Ctr |
for Applied Research
|Hershey, PA||Penn St. Univ||80,900|
|4320 Forest |
|St. Louis, MO||Washington Univ||152,400|
|BRDG Park at Danforth|
Plant Science Center
|St. Louis, MO||Monsanto Co.||109,700|
|Univ of Miami Life |
Science & Technology Park
|Miami, FL||Univ of Miami||252,100|
|Wake Forest |
|Winston-Salem, NC||Wake Forest Univ||242,000|
at ODU I
|Norfolk, VA||Old Dominion Univ||95,600|
|Innovation Research |
at ODU II
|Norfolk, VA||Old Dominion Univ||95,600|
|University Tech |
Park at ITT
|Chicago, IL||IL Institute of Technology||127,200|
Wexford Science & Technology also owns parking garages adjoining buildings in Philadelphia and Baltimore and owns additional land that could support an estimated 300,000 square feet of new development.
About $89 million of the consideration is for three under-development projects totaling 935,000 square feet of rentable space under construction. The projects anchored by the University of Pennsylvania Health System, Wake Forest University and Washington University in St. Louis, are collectively 68% pre-leased.
The deal includes $169 million in assumed debt and about $133 million of BioMed Realty common equity, of which $125 million may be payable in cash or common stock, with the balance payable in cash.
In addition to the Wexford transaction, BioMed Realty expects to use net proceeds of the offering to repay a portion of the outstanding unsecured debt under its line of credit and for other general corporate and working capital purposes.
Goldman, Sachs & Co. acted as financial advisor to the primary shareholder of Wexford Science & Technology. Morgan Stanley acted as financial advisor to BioMed Realty. Stifel acted as financial advisor to Wexford Science & Technology.
The existing portfolio, all developed and delivered between 2005 and 2011, is about 86% leased, with two-thirds of base rents generated from academic and medical institutions and A-rated life science companies on an annualized basis, with an average remaining lease term of 13 years.
Ranked by annualized base rents, top tenants include: the University of Pennsylvania Health System; Washington University in St. Louis; Wake Forest University; the University of Maryland; the University of Miami; Old Dominion University; the Illinois Institute of Technology and Penn State University.