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Alexandria (ARE) Plans 1.6M SF Biotech Campus in San Carlos

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Alexandria Real Estate Equities (ARE - Free Report) is progressing well with its plan for a biotech campus in San Carlos, CA. According to a report from The Business Journal, plans for a 1.6 million-square-foot project have already been submitted, which calls for conversion of an industrial area into a biotech campus.

The site comprises the former corporate headquarters of Kelly-Moore Paints, together with a number of one- or two-story office and industrial buildings constructed in the 1960s. The transformation plan for this strip of property between Industrial and Old County roads will result in six buildings of five to seven floors, an amenities structure, as well as two parking garages with 3,802 spaces and a small park, per the report.

Notably, the region has lured investors as both tech and biotech companies are seeking spaces for expansion. In fact, two structures, aggregating 526,178 square feet, are already undergoing construction for Alexandria along the Industrial Road, situated cater-cornered from the location. Drug developer ChemoCentryx Inc. has already been roped in as a tenant for this property. All these developments will comprise the Alexandria District for Science & Technology, which will enjoy convenient Caltrain access as well as easy vehicular access.

Moreover, in September, the company announced the buyout of 3160 Porter Drive, a 92,000 rentable square feet (RSF) redevelopment project in Stanford Research Park, for $26 million. The transaction highlights the company’s efforts to expand presence in the greater Stanford innovation cluster.

Notably, continued strong leasing activity and rental rate growth have helped Alexandria excel in the recent quarters. In addition, solid external growth and strategic capital allocation to highly-leased value-creation pipeline are encouraging.

The company’s properties are located in markets, characterized by high barriers to entry, and limited supply of available space, enabling it to enjoy higher occupancy rate. Adequate financial flexibility and a decent liquidity position poise it to pursue strategic development and redevelopment projects. However, a significant development pipeline escalates operational risks and exposes it to rising construction costs.

Alexandria currently carries a Zacks Rank #3 (Hold). In the year-to-date period, shares of the company have appreciated 38.8%, outperforming the industry’s rally of 22.7%.



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