Jones Lang LaSalle (“JLL”), as exclusive representative, is pleased to offer for sale the fee-simple interest in 5225 Exploration Drive, a 54,173 SF Life Sciences facility (the “Asset” or “Property”) located in Indianapolis, IN. The Property is 82% occupied by 10 tenants with an average tenure at the property of 7.5 years. This property is being offered at a significant discount to replacement cost. The largest tenant who occupies half of the building, Q2 Solutions, has signed a LOI to expand, move to a net lease, and extend its lease for an additional five years starting in November 2021. The second largest tenant Novo Nordisk (NYSE: NVO and Moody’s A1) has extended its lease through November 2024. Both tenants have significant investments in their lab space and have increased their square footage through the extensions.
The Property offers investors the opportunity to acquire a Life Sciences facility that has strong tenure in its diverse roster of existing tenants, recent construction with limited to no deferred maintenance, and significant investment into the space from tenants. The property has typically been operated as a research incubator where companies have been able to capitalize on alignments with Purdue University. This has generally led to tenant friendly short-term leases and limited rental growth. An investor can renew, extend, and move the tenants into net leases to reduce landlord risk. This strategy has been started by Purdue Research Foundation by the renewal and expansion of Q2 Solutions. This facility remains crucial to Q2 Solutions as they have invested significant capital into building out multiple large lab spaces.
- Desirable office / lab building branded as Purdue Technology Center currently 82% occupied by 10 tenants including national and start-up companies.
- The two largest tenants, Novo Nordisk and Q2 Solutions, have signed longer lease commitments within the last 3 months adding certainty of income.
- Largest tenants have invested significant capital into their lab space. Novo Nordisk has invested over $2M into its space per Purdue Research Foundation (“PRF”). Q2 has spent significant capital in its space as well likely in excess of $3M.
- Tenants have occupied this space for a weighted average of 7+ years showing the functionality and usefulness of the space.
- The Property is located approximately 10 miles from IUPUI in downtown Indianapolis. IUPUI has medical research facilities on campus including the nation’s largest medical school, IU School of Medicine.
- IU Health and Eli Lilly are large medical and pharmaceutical presences in downtown Indianapolis as well which adds to the available talent pool for the property’s tenants.
- Novartis, a Swiss multi-national pharmaceutical company, is building a $70M manufacturing facility on an adjacent property with average wages of $53 per hour which indicates continued industry interest in Indianapolis.