GI Partners Buys Life Science Facility in Metro D.C. for $322.5M

by John Nelson

ROCKVILLE, MD. — GI Partners has acquired a 290,000-square-foot life science facility in Rockville for $322.5 million. The facility is located at 9911 Belward Campus Drive, roughly 20 miles northwest of Washington, D.C.

The property is situated along the Interstate 270 corridor that is commonly referred to as “DNA Alley”. The manufacturing facility is fully occupied by Human Genome Sciences Inc. (HGSI). The global healthcare company, which is a wholly owned subsidiary of GlaxoSmithKline, has leased the space through June 2026.

“We are very pleased to own 9911 Belward, an institutional-quality property with state-of-the-art life science improvements,” says Mike Armstrong, GI’s vice president. “The facility’s location in one of the nation’s largest biotechnology clusters, coupled with its robust infrastructure, makes it an attractive property for life science and biotechnology use.”

BioMed Realty (NYSE: BMR) acquired the facility in 2006 as part of a sale-leaseback transaction with HGSI. The company’s board of directors declared a special dividend of $0.30 per share of common stock, reflecting a return to stockholders of a portion — about $61 million — of the sale proceeds.

BioMed plans to use the remaining proceeds to pay down the balance of the company’s unsecured revolving credit facility. BioMed would also like to reinvest some of its proceeds into its laboratory and office facilities in the core centers of life science innovation. This includes properties in Boston/Cambridge, the San Francisco Bay area and San Diego.

“The sale of the manufacturing facility represents yet another example of our proven ability to create value at the asset level,” says Alan Gold, BioMed’s chairman and CEO. “Our team’s underwriting and investment expertise allowed our company to acquire this facility at an attractive cost basis in 2006, collect significant annual cash flows and ultimately harvest value with a very substantial gain. We are proud of the significant value creation this investment has generated for our stockholders, and we believe that the resulting special dividend provides a small portion of the tangible benefit our team is delivering for our investors. Over time, we expect to reinvest these proceeds into higher growth investment opportunities, like our recent development projects in Cambridge, Seattle and elsewhere.”

GI Partners purchased the facility through TechCore LLC, a $1 billion discretionary core real estate fund that is managed by the firm. Formed in early 2012, TechCore acquires technology-advantaged properties, including data centers, internet gateways, corporate campuses for technology tenants and life science properties that are located in core MSAs and leased to industry-leading tenants.

TechCore has acquired more than 2.7 million square feet of mission critical data center, life science and office properties throughout the United States.

San Francisco-based GI Partners is a private investment firm that manages more than $11 billion in capital commitments through private equity and real estate strategies for recognized institutional investors. This includes some of the largest state and sovereign pension funds in North America, Europe, Australia, Asia and the Middle East.

San Diego-based BioMed Realty Trust provides real estate solutions to the life science community. It specializes in biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry. BioMed owns, or has interests in, about 17.2 million square feet of space.

— Nellie Day

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