Publisher’s Letter (June 2007)

Is it time to break into bio?

BIOSCIENCE REAL ESTATE MIGHT BE YOUR NEW FRONTIER

Dear Reader:

Is it time for your organization to diversify into bioscience real estate?

We think so – and we already have. In March 2006, we launched a publication called Bioscience Real Estate Insights^™. BREI^™ is modeled after Healthcare Real Estate Insights^™. But rather than covering medical office buildings (MOBs), ambulatory surgery centers, hospitals and the like, BREI^™ covers office buildings used by bioscience firms, R&D facilities, bio manufacturing and distribution facilities, bioparks and the like.

It’s a nice fit for us. We specialize in delivering news and trends information regarding highly specialized niches in the commercial real estate industry. HREI^™ remains our flagship publication, but we constantly monitor and study the market to identify other niches that aren’t well served by mainstream commercial real estate media. We launched BREI^™ because the same demographics – an aging population, etc. – that are driving the growth of the healthcare market are fueling the growth of demand for biotech, pharmaceuticals and medical devices, and the associated real estate.

Historically, though, HREI^™ and BREI^™ have covered two very different markets. Most healthcare real estate professionals have never dabbled in bio, or have probably even heard of some of the largest players in the sector – firms like Alexandria Real Estate Equities Inc. (NYSE: ARE), BioMed Realty Trust Inc. (NYSE: BMR), Lyme Properties LLC and Wexford Science + Technology. Likewise, the users of bio real estate are different. Rather than hospitals, health systems and physician groups, the primary users are biotech, pharmaceuticals and medical device manufacturers like Amgen Inc. (Nasdaq: AMGN), Genentech Inc. (NYSE: DNA) and Genzyme Inc. (Nasdaq: GENZ), as well as academic research institutions.

So although we saw some synergies between the healthcare and bio real estate markets, it has been our experience that there hasn’t been much overlap.

Until now.

In April, BREI^™ reported a major milestone for the bio market: a $507 billion push into bio real estate by Prudential Real Estate Investors, a prominent investment management firm that has for many years been a sizable investor in healthcare real estate.

In May, HREI^™ reported that ProMed Properties Inc. plans to acquire $2 billion in healthcare properties in the next two years – and ProMed appears equally interested in medical research facilities and medical office buildings.

Now, healthcare real estate mainstay Health Care Property Investors Inc. (NYSE: HCP) has announced that it will acquire a $2.9 billion U.S. bio real estate portfolio from Slough, England-based SEGRO, formerly known as Slough Estate plc. (Please see “HCP bounds into bio” on Page 1.)

We placed our own bet last year when we launched BREI^™. Now, with major players like HCP, Prudential and ProMed also breaking into the market, it’s looking like a pretty good gamble. Maybe it’s time your firm also took a closer look at bioscience real estate.

Murray W. Wolf, Publisher

P.S. I encourage you to learn more about the bioscience real estate market. For a free sample copy of BREI^™, please go to www.breinsights.com. For a limited time, HREI^™ subscribers can also save $200 on a new subscription to BREI^™ by using this promotional code: CHA199