New REIT Buys Two Area Life Science Properties

SEATTLE-Two area life science-oriented office and laboratory buildings are now in the hands of San Diego-based Biomed Realty Trust Inc., a new REIT focused on life sciences-oriented office buildings. Located at 101 Elliott Ave. W. in the city and 3450 Monte Villa Parkway in Bothell, the properties were part of a larger group of assets acquired shortly after the company went public earlier this month. Biomed paid slightly more than $53.4 million for 101 Elliott, which contains 135,000-sf of lab and office space. The purchase price includes $17.3 million of assumed debt that bears interest at about 7.4% and matures in November 2007, and $238,000 sf of closing costs. The building is fully leased to two tenants, Chiron Corp. (71,153 sf) and Cell Therapeutics (63,836 sf). Both leases run into early 2008, not including two five-year renewal options for Chiron and one five-year renewal option for Cell Therapeutics. The tenants’ average annualized triple-net lease rate is $37 per sf.Biomed paid about $16.2 million for the Monte Villa Parkway property, including $40,000 in closing costs. Built in 1996 and renovated in 2002, the property consists of 37,014 sf of laboratory and office space. The property is fully leased through 2016 to a single tenant, Nastech Pharmaceutical Co. Inc. Nastech, a public company specializing in proprietary drug delivery technologies, is in the process of expanding the space to 51,000 sf and will begin paying rent on the expansion space in January 2005. Nastech is currently paying an annualized triple-net lease rate of $22.32 per sf.Biomed went public earlier this month at $15 per share. Citing a “quiet period,” company executives declined comment on the transactions beyond quoting the information included in the company’s prospectus. According to the SEC filing, the company’s strategy is to buy and manage buildings suitable for life science offices and laboratory space in six markets across the country: the Puget Sound area, San Diego, San Francisco, Boston, Maryland, Pennsylvania and the greater New York/New Jersey area. Including the 13 properties it assumed or acquired as part of its IPO, the company has a portfolio of 13 properties totaling 2.4 million sf.