Alexandria Real Estate Equities has sold a life sciences building in Palo Alto as part of its ongoing property sales in the Bay Area. The 60,000-square-foot property at 3350 West Bayshore Road was purchased by an affiliate of Strada Investment Group for $29 million, according to the Silicon Valley Business Journal. This equates to roughly $483 per square foot.
The building is currently 73 percent leased, with tenants such as Exai Bio, a liquid biopsy company, and Clariant Corporation, which manufactures specialty chemicals.
Alexandria is known for developing large office complexes focused on life sciences in major hubs including Boston, the San Francisco Bay Area, San Diego, Seattle, New York City, Austin, and North Carolina’s Research Triangle. These properties generate about 77 percent of Alexandria’s annual rental revenue.
Recently, the life sciences real estate sector has seen reduced rental demand and stalled development projects. In response to these market conditions, Alexandria has been selling off some assets or changing their use. The company recently sold a fully leased life sciences building and a medical facility in North Carolina and plans to convert some San Francisco lab spaces into offices.
Earlier this week, Alexandria finalized a sale with the University of California, San Francisco (UCSF) involving two adjacent buildings in Mission Bay. FibroGen previously used one building as its headquarters before leaving its lease early last year; UCSF occupies the other property. The university intends to expand several programs—including dentistry, medicine, nursing, pharmacy and physical therapy—into these former Alexandria-owned buildings.
Reports have also emerged that Alexandria is preparing to sell more assets in San Francisco—including the long-contested site of the San Francisco Tennis Club—as it seeks to reduce its holdings in the city further.
By October this year, Alexandria had completed $508 million worth of property sales. The real estate investment trust aims to sell $1 billion worth of non-core properties during the fourth quarter and complete this process by 2027.
