Hendrie Lane Capital, V12 Investments and The Zaro Group have acquired a two-building research and development and advanced manufacturing portfolio at 3 and 6 Riverside Drive in Andover, Massachusetts, for $43.5 million.
The portfolio spans 170,771 square feet across 16 acres and was acquired from Ciminelli Real Estate Corporation.
The acquisition represents the first investment under a new Hendrie Lane strategy focused on R&D and advanced manufacturing properties across Greater Boston, the New York Tri-State Region, Greater Washington, D.C., the San Francisco Bay Area and North Carolina’s Research Triangle.
Fishman, NEOLab, Physical Sciences, and SciAps fully lease the properties. Three of the four tenants use Riverside Drive as their headquarters.
V12 Investments already owns six manufacturing and R&D assets across Greater Boston and Southern New Hampshire, making the Andover properties an extension of its existing regional portfolio.
Hendrie Lane believes the R&D and advanced manufacturing real estate segment is benefiting from constrained supply, high replacement costs and increasing demand associated with domestic manufacturing and supply-chain investment.
The properties are located about 25 miles north of Boston near Interstates 93 and 495 and approximately five miles from the New Hampshire border.
The buyers said new construction costs in the region exceed $500 per square foot, allowing the acquisition to be completed at a substantial discount to replacement cost.
JLL’s Scott Carpenter represented the seller.
JLL Capital Markets’ Andrew Gray, Hugh Doherty and Emily Fuller arranged $28.6 million in acquisition financing for the buyers from Washington Trust Bank.
KEY QUOTES:
“Riverside Drive is exactly the kind of asset we built this strategy around: well-located, high-quality, well-maintained buildings, acquired at a significant discount to replacement cost and to historical market pricing, and leased long-term to time-tested tenants who have invested heavily in their space. The quality of the real estate, the yield profile and the duration of the existing leases give us immediate, steady cash flow from day one, with meaningful upside as the market continues to recognize the value of this asset class.”
Tony Calabrese, Principal of Hendrie Lane Capital
“3 & 6 Riverside are a natural extension of V12’s existing portfolio and investment thesis. These properties complement our current cluster of six manufacturing and R&D assets across Greater Boston and Southern New Hampshire and build on the experience we’ve developed investing in and operating these types of specialized facilities. We’re excited to partner with Hendrie Lane and The Zaro Group and continue investing in the buildings to support the companies that occupy them.”
Brian Appelman, Managing Partner of V12 Investments
“What drew us to this space, which we believe is in the early innings of attracting institutional investment, is that you can buy it at office-type pricing but it behaves much more like industrial. The leases are triple-net with duration, landlords give very little in concessions, and the tenants themselves typically make substantial investments in their facilities, creating a strong connection between their operations and the underlying real estate. That produces reliable income that lends itself to efficient financing. Add the momentum behind onshoring and domestic supply chains, and we think this sector has a long runway of rent growth and rising investor interest ahead of it.”
Tony Calabrese, Principal of Hendrie Lane Capital
