Moderna (NASDAQ: MRNA) has selected Alexandria Real Estate Equities (NYSE: ARE) to develop its new corporate headquarters and core research and development (R&D) facility in Cambridge, Massachusetts. The real estate investment trust (REIT) is a leader in developing, owning, and operating life science real estate. This new facility will showcase the office REIT's capabilities while providing Moderna with the space it needs to expand its groundbreaking mRNA platform.
A cutting-edge facility for a game-changing platform
Alexandria will develop, operate, and construct a new 462,000-square-foot property for Moderna at 325 Binney Street on the Alexandria Center at One Kendall Square, a mega-campus for the life sciences industry in Cambridge. The highly sustainable building will feature leading-edge laboratory space along with high-end offices. It will also feature engaging gathering spaces, walking paths, and open outdoor areas, all designed to foster collaboration and allow Moderna to attract and retain the best talent to support its mRNA platform.
Moderna's new headquarters will also be the most sustainable lab building in Cambridge. It should eliminate most of the fossil fuels consumed to heat the building, enabling it to operate as a net-zero-energy commercial lab facility. The building will feature ultra-efficient mechanical and envelope systems (i.e., the building shell), geothermal energy as its primary heating source, and use renewable energy generated on- and off-site. On top of all that, the design proactively addresses climate change risk by incorporating several measures to cut flooding risk.
Construction on the site has already started and is on track for completion in 2023, when Moderna expects to begin a phased move-in process. It will provide Moderna with the space it needs to expand and continue working on its pipeline of mRNA medicines while deepening and expanding their strategic relationship with Alexandria. For over a decade, Alexandria has been working with Moderna to meet its real estate needs.
A leader in life science real estate
Alexandria is a logical choice to develop Moderna's new headquarters, given its expertise. For example, in Seattle, the company recently completed a new state-of-the-art waterfront headquarters and R&D facility for Adaptive Biotechnologies (NYSE: ADPT). The amenity-rich, 100,086-square-foot property will provide the cutting-edge life science company with the space it needs to expand. The company has doubled its workforce since the start of the pandemic, due in part to its success in developing testing solutions to help measure T-cells.
Because of projects like that, Alexandria is increasingly becoming the real estate partner of choice for life science companies. It leased 1.9 million square feet of space across its portfolio during the second quarter, driven by historic demand for high-quality office/lab space. That was the highest leasing activity in a single quarter for the company.
Robust demand led Alexandria to acquire more space in key life science clusters that it can convert into high-quality office/lab space. It spent $1.1 billion during the second quarter to purchase 5.5 million square feet of space in its key life science cluster submarkets. It sees value-creation opportunities for 4.7 million of those square feet in future redevelopment projects to meet the specialized needs of the sector.
Overall, Alexandria envisions spending up to $5.5 billion on acquiring properties this year to meet the current and future needs of tenants, primarily those in the life science industry.
Benefitting from the sector's growth
Alexandria's focus on providing for the specialized real estate needs of life science companies is paying dividends. It's benefiting from life sciences growth, which has accelerated due to the pandemic. That's allowing Alexandria to sign significant leases for existing space and new development projects, helping it grow shareholder value.