JLL REIT closes on $47M Jersey life science acquisition

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JLL Income Property Trust, an institutionally managed daily
NAV REIT, announced the acquisition of 170 Park Avenue, a 147,000 s/f purpose-built
life sciences building in Florham Park, New Jersey.

The property is net-leased on a long-term basis as premier
laboratory space and the corporate headquarters for Celularity Inc., a
clinical-stage biotechnology company. The purchase price was approximately $47
million.

“Within the office sector our priority investments are
healthcare oriented, focusing on medical office and life science properties,”
said Allan Swaringen, President and CEO of JLL Income Property Trust.

“In a post-COVID environment of eroding fundamentals for
traditional multi-tenant office properties, these two healthcare-oriented
sectors stand out for their lower vacancy rates, healthy net absorption and
balanced new supply due to significant barriers to entry because of higher
construction and tenant improvement costs. 
These factors also lead to higher tenant retention even during periods
of weakness within traditional office market environments.”

Swaringen added: “While we are excited about expanding our
healthcare allocation, we were also attracted to acquiring 170 Park Avenue
significantly below replacement cost and with tenant and prior owner-funded
improvements to the building in excess of $80 million. Celularity’s
improvements resulted in 170 Park housing some of the most advanced laboratory
and manufacturing space for cellular medicine and biomaterials in the country.”

The lease term is for 15 years and provides for an average
of 2.5 percent annual rent increases.

With over 3,200 life science companies, New Jersey is a
major biopharmaceutical and drug development hub within the US. The New Jersey
life science market totals in excess of 17 million square feet of research,
development and lab space ranking among the top markets in the country behind
Boston, San Francisco and San Diego.

170 Park Avenue is located on more than 18 acres in The
Green at Florham Park, a 270-acre master planned mixed-use office park, which
includes tenants such as BASF’s North American Headquarters and the New York
Jets headquarters and training facility.

This investment is JLL Income Property Trust’s second
acquisition in the healthcare sector in this market following its 2016 purchase
of 140 Park Avenue, a newly constructed 100,000 s/f medical office building
leased on a long-term basis to Summit Medical Group, New Jersey’s largest
multi-specialty doctor practice group.

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