Case Study
Wet-Lab Life Science Acquisition: Tenant Credit-Weighted Underwriting
The Deal
You are an acquisitions analyst at Vantage Point Life Sciences Capital, LP, evaluating the purchase of 1200 Discovery Drive, a fully-leased 120,000 SF wet-lab and office building in the Alameda Bioscience Park. The property is leased to two very different biotech tenants: Solenne Therapeutics, Inc. (NASDAQ: SLNE), a large, publicly traded, investment-grade commercial-stage biopharmaceutical company, and Anthem Cell Sciences, Corp., a smaller, venture-funded, pre-revenue cell therapy company. Vantage Point has a signed purchase and sale agreement to acquire the property for $115,000,000 and is working with Continental Pacific Bank, N.A. on an acquisition loan structured around each tenant's credit quality rather than a single blended metric. Review the tenant summary, the T12 operating statement, the Anthem Cell Sciences lease excerpt, and the bank's indicative term sheet, then work through blended NOI, a tenant-credit-weighted NOI, the going-in cap rate, and how the tenant credit mix should shape the buyer's target leverage.
You’ll Practice
- Calculate blended NOI for a multi-tenant life science property from a T12 operating statement
- Calculate a going-in cap rate from blended NOI and purchase price
- Allocate NOI between tenants and apply a tenant-credit-weighting discount to reflect a pre-revenue tenant's higher risk
- Read a venture-backed tenant's lease for financial reporting and going-concern covenants that signal credit and refinancing risk
- Judge how tenant credit mix should influence target leverage and loan structuring beyond what a blended cap rate alone suggests