SAN DIEGO AND BALTIMORE — BioMed Realty Trust Inc. (NYSE: BMR) has entered into a definitive agreement to merge with Wexford Science & Technology LLC, a subsidiary of Wexford Equities LLC, bolstering BioMed Realty’s position as a provider of real estate to the life science industry.
Baltimore-based Wexford Science & Technology is a private real estate investment and development company that owns and develops institutional-quality life science real estate for academic and medical research organizations.
The aggregate consideration for Wexford Science & Technology is approximately $640 million, excluding transaction costs and subject to adjustment based on working capital levels and construction and development costs incurred prior to closing.
Wexford Science & Technology will operate as a wholly owned subsidiary of BioMed Realty.
“The combination of BioMed Realty and Wexford Science & Technology further expands our footprint into the university markets with high-quality assets, credit tenants and long-term leases,” says BioMed Realty’s Chairman and CEO Alan Gold. “In addition, it accelerates our growth as the leading provider of real estate to the life science industry.”
Approximately $551 million of the initial consideration is for Wexford Science & Technology's operating portfolio, which includes about 1.6 million rentable square feet of newly developed, state-of-the-art research facilities in high-barrier sites located on or immediately adjacent to leading academic, medical system and research institution campuses.
The operating portfolio, all of which was developed and delivered between 2005 and 2011, is approximately 86 percent leased, with 66 percent of annualized base rents generated from academic and medical institutions and A-rated life science companies having an average remaining lease term of 13 years.
Top tenants by annualized base rents include, among others: 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.
Approximately $89 million of the initial consideration is for projects currently under development. Wexford Science & Technology has approximately 935,000 square feet of rentable space currently under construction in three projects that collectively are 68 percent pre-leased. The University of Pennsylvania Health System, Wake Forest University and Washington University in St. Louis are the anchor tenants.
Wexford Science & Technology also owns parking garages in Philadelphia and Baltimore with 419 and 638 stalls, respectively, that support its life science developments. Wexford also owns additional land parcels that can support an estimated 300,000 square feet in additional development potential.
“Beyond the opportunity to add the high-quality assets of the operating portfolio and the attractive development pipeline, we are particularly excited about the strategic opportunity to further penetrate the university segment with the addition of the team from Wexford Science & Technology,” says Kent Griffin, president and COO of BioMed Realty.
“This group, which includes seasoned life science real estate experts with a successful track record of serving the specialized needs of universities, university-related institutions and healthcare systems, will continue to operate under the leadership and direction of James Berens, providing additional depth of skills and breadth of capabilities to our operating platform,” adds Griffin.
BioMed Realty is the ideal partner for Wexford Science & Technology, according to Berens, “because of their leadership position in the life science industry and our shared technical expertise and understanding of, and approach to, life science real estate.”
The transaction is expected to close in or about the third quarter of this year.
The stock price of BioMed Realty closed at $21.70 per share on Wednesday, March 27, up from $19.07 per share a year ago.
— Matt Valley