Frequently Asked Questions
1. In what regions does BioRealty (“ BRI”) operate?
BRI invests, develops, and provides capital advisory services throughout the United States and Canada. Currently, BRI has offices in Southern California, Houston and Washington D.C., providing the firm a balanced geographical base and ready access to any location in North America.
2. What type of facilities does BRI invest in and develop?
BRI invests in and develops facilities occupied by one or more science and technology clients in both the private and public sectors.
3. What do you mean by “science and technology firms?
These are firms or companies that fall within a wide range of industry sectors including biotechnology, pharmaceuticals, nanotechnology, bioinformatics, biomedical, medical device, diagnostics, biopharmaceutical processing, high technology, data management and storage among others.
4. What type of investment and development transaction does BRI do?
As an investor/developer, BioRealty performs 5 types of transactional services:
1. Sale-Leasebacks (for lease only) – Acquisition of an existing facility, which is leased-back to the current occupant.
2. Buy-to-Suits (for lease or owned) – Acquisition and rehabilitation of an existing facility to satisfy specific client requirements (“to-suit”).
3. Build-to-Suit Development (for lease or owned) – Ground up development of a new facility to-suit.
4. Acquisitions – Acquisitions of existing science or technology real estate ranging from 75% to 100% leased.
5. Science Park Development – Serve as the development partner to public or private entities seeking to form or expand a science or technology business park.
5. What type of transaction does BRI do most frequently?
Acquisitions are probably the most common type of transaction for BRI. BRI has dedicated capital for to-be-acquired, long term leased science and technology properties, which it needs to invest. BRI is actively pursuing acquisitions in all North American markets as is able to rapidly close.
6. Can BRI acquire an existing facility, rehab it and lease it to my company?
BRI refers to these transactions as buy-to-suits. In today’s market where many good, vacant science and technology facilities exist, buying and rehabilitating an existing building may be an excellent decision for your firm. BRI can assist you in estimating the rehab costs and schedule, providing you a lease rate, and evaluating the buy-to-suit alternative versus ground up build-to-suit development.
7. Why should I hire a build-to-suit developer rather than just manage the development process myself?
When developing a new facility, hiring a 3rd party developer is not always necessary. If your firm has all the necessary construction and development expertise in-house, extensive access to capital, and is not concerned about adversely impacting financial statements or optimizing tax benefits, hiring a 3rd party developer probably does not make sense; however, most companies don’t fit this profile. BioRealty can fill these missing gaps, free up precious internal resources, and because BRI specializes in the development of large, complex, science and technology facilities, BRI can add significant value through specialized construction, development and financial expertise.
8. I notice you mention leasing - should I lease or own my facility?
It depends upon your company’s specific situation. No two clients are identical. Generally public companies or companies with limited working capital prefer leasing; however, BRI’s clients have a wide range of needs and as a result BRI has assisted its clients in leasing, owning, completing synthetic leases, and completing tax advantaged lease arrangements. BRI can assist your company in evaluating all available lease vs. own alternatives to insure you are making the best decision for your particular situation.
9. What are the benefits of leasing?
Under current FASB rules, easing will positively impact your company’s financial statements, enhance ROE and ROI, and enhance key financial ratios, and leasing allows your company to deploy cash in a more productive manner. Leasing may also allow you to optimize tax benefits. BRI’s unique ability to maximize these multiple benefits and at the same time recognize the value inherent in large, complex facilities differentiates BRI from most traditional real estate investors.
10. If I want to lease can I have a lease which allows me flexibility?
Yes. Many landlords will tell you that they have a set lease form which is not negotiable. This is not the case with BRI. BioRealty strives to customize the lease arrangement to fit your specific needs, which means BRI will consider all lease types and terms.
11. If I choose to lease, what will my lease rate be?
BRI determines a client’s lease rate based on the actual cost to build or buy the facility and the cost of capital. Often times this means you pay a lease rate that is lower than the prevailing market rates for an existing, available-for-lease facility. To accurately determine your lease rate, BRI will need to work with you to decide on the most appropriate type of lease. If the project involves tenant fit-out or development BRI will work with you to outline general specifications for your project, and complete a preliminary budget and schedule. Once this is done, BRI will provide you a lease rate based upon the lowest cost of internal and/or external capital available. Moreover, BRI performs this process on a completely open book basis.
12. What role do Brokers play in your business activities?
Brokers play an essential part in BRI’s activities. Brokers are often hired by the science or technology client and most recognize BioRealty as one of the leading investment/development firms in this unique industry segment. If BioRealty is repositioning a formerly leased property, BRI will hire a brokerage firm to execute the repositioning (leasing) and exit (sale) strategies. In addition, many Brokers – who know BRI’s specialty and ability to close quickly – seek out qualifying investment opportunities on behalf of BRI. BRI is very pleased to have long standing relationships which a majority of the nation’s leading brokerage firms with a life science or science and technology specialty, and the BRI team hopes to continue growing these relationships in the future.