Key Takeaways
- • KKR committed $475 million through capital accounts it advises to a joint venture investment in Alexandria Real Estate Equities' majority ownership interest in Campus Point, a nearly 2 million-square-foot life science Megacampus in San Diego, according to a Business Wire release.
- • KKR acquired a 49% noncontrolling equity interest in Alexandria's Campus Point investment entity, representing approximately 28.5% indirect ownership in the underlying joint venture.
- • Alexandria retains operational control of the property and will continue overseeing its operations and development.
- • Campus Point's long-term leases with corporate and institutional tenants account for approximately 98% of campus rental revenue, per the announcement.
- • Tenants include Novartis, Bristol Myers Squibb, Eli Lilly, Leidos and UC San Diego, and the capital is intended to fund continued development, leasing and property enhancements.
Summary
KKR (NYSE: KKR) and Alexandria Real Estate Equities, Inc. (NYSE: ARE) announced a $475 million joint venture investment by capital accounts advised by KKR in Alexandria's majority ownership interest in Campus Point by Alexandria Megacampus, according to a Business Wire release. The campus is a nearly 2 million-square-foot life science Megacampus located in San Diego's University Town Center submarket, adjacent to the University of California San Diego, the Salk Institute and Scripps Research.
Under the structure, KKR acquired a 49% noncontrolling equity interest in Alexandria's Campus Point investment entity, equal to approximately 28.5% indirect ownership in the underlying joint venture. Alexandria said the investment provides flexible, long-term capital to support continued development, leasing and property enhancements at the campus. Alexandria will continue to oversee the property's operations and development and will maintain control of the joint venture.
The campus houses pharmaceutical, biotechnology, research and technology tenants, including Novartis, Bristol Myers Squibb, Eli Lilly, Leidos and UC San Diego. Long-term leases with leading corporate and institutional tenants account for approximately 98% of the campus's rental revenue, which the companies cited as the basis for the investment.
Sam Caven, Co-Head of Acquisitions, Americas at KKR, said the firm looks forward to supporting the campus's continued development and driving long-term value. Peter Moglia, Alexandria's Chief Executive Officer and Chief Investment Officer, described the transaction as an important step in optimizing the company's capital structure and unlocking portfolio value, and said it demonstrates the appeal of Alexandria's high-quality assets to institutional investors.
Eastdil Secured Savills served as financial advisor to Alexandria, with Proskauer as Alexandria's legal advisor and Gibson Dunn as legal advisor to KKR.
Under the structure, KKR acquired a 49% noncontrolling equity interest in Alexandria's Campus Point investment entity, equal to approximately 28.5% indirect ownership in the underlying joint venture. Alexandria said the investment provides flexible, long-term capital to support continued development, leasing and property enhancements at the campus. Alexandria will continue to oversee the property's operations and development and will maintain control of the joint venture.
The campus houses pharmaceutical, biotechnology, research and technology tenants, including Novartis, Bristol Myers Squibb, Eli Lilly, Leidos and UC San Diego. Long-term leases with leading corporate and institutional tenants account for approximately 98% of the campus's rental revenue, which the companies cited as the basis for the investment.
Sam Caven, Co-Head of Acquisitions, Americas at KKR, said the firm looks forward to supporting the campus's continued development and driving long-term value. Peter Moglia, Alexandria's Chief Executive Officer and Chief Investment Officer, described the transaction as an important step in optimizing the company's capital structure and unlocking portfolio value, and said it demonstrates the appeal of Alexandria's high-quality assets to institutional investors.
Eastdil Secured Savills served as financial advisor to Alexandria, with Proskauer as Alexandria's legal advisor and Gibson Dunn as legal advisor to KKR.
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