KKR buys 49% of Alexandria's Campus Point entity for $475 million

KKR's advised capital accounts paid $475 million for a 49% noncontrolling equity interest in Alexandria Real Estate Equities' Campus Point investment entity, the two firms said. The stake equates to about 28.5% indirect ownership of the underlying joint venture that holds Alexandria's majority interest in the campus.

Campus Point by Alexandria Megacampus spans nearly 2 million square feet in San Diego, with Novartis, Bristol Myers Squibb, Eli Lilly, Leidos and UC San Diego among tenants. The campus sits adjacent to UC San Diego, the Salk Institute and Scripps Research. Alexandria said the investment provides flexible, long-term capital for continued development, leasing and property enhancements. Other terms were not disclosed.

For allocators, the deal sets a comparable valuation: $475 million for about 28.5% indirect ownership of a nearly 2 million-square-foot leased life sciences campus. Alexandria keeps leasing and development decisions at the campus, so KKR's return depends on how those decisions play out.

As Private Real Estate Daily previously reported, Alexandria's net loss widened to $638.5 million and funds from operations fell to $264.4 million from $377.8 million a year earlier, even as lab leasing picked up.