BALTIMORE-San Diego-based BioMed Realty Trust has entered into an agreement to merge with the locally-based Wexford Science & Technology, LLC, a subsidiary of Wexford Equities. The deal is valued at $640 million, excluding transaction costs. When the transaction closes, Wexford Science & Technology will be a wholly owned subsidiary of BioMed Realty.
A successful completion of this deal will deepen -- significantly -- BioMed's footprint in the life sciences real estate sector, particularly in the university markets, according to a statement by BioMed Realty's chairman and CEO, Alan D. Gold.
Indeed, university research is the heart of Wexford Science & Technology's formidable operating portfolio of approximately 1.6 million square feet of facilities. These facilities, as Gold noted, are located at or immediately adjacent to top academic, medical system and research institution campuses. Approximately $551 million of the initial consideration is for this portfolio.
The operating portfolio, all of which was developed and delivered between 2005 and 2011, is approximately 86% leased. About 66% of annualized base rents have an average remaining lease term of 13 years.
Some of the top tenants in the portfolio 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.
In addition, some $89 million of the initial consideration is for the 935,000 square feet of space currently under construction in three projects that are, collectively, 68% pre-leased. These projects are anchored by the University of Pennsylvania Health System, Wake Forest University and Washington University in St. Louis.
Finally, Wexford Science & Technology also owns parking garages in Philadelphia and Baltimore with 419 and 638 stalls, respectively, that support Wexford Science & Technology's life science developments. It also owns land parcels that can support an estimated 300,000 square feet in additional development potential.
To help finance the deal, BioMed is also going to market with a public offering of 15 million shares. The REIT just priced them at $21.40 per unit and expects to reap gross proceeds of $321 million.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
