Blackstone acquires $3.45B lab office portfolio

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Blackstone announced that Blackstone Property Partners Life Sciences (BPPLS) will acquire a 2.3 million square foot portfolio of lab office buildings from a Brookfield Asset Management real estate fund for $3.45 billion.

BPPLS is Blackstone Real Estate’s long-term, perpetual capital, core+ return life sciences strategy that owns BioMed Realty, Blackstone’s life science real estate portfolio company. The transaction is expected to close in the first quarter of 2021 subject to customary closing conditions.

Approximately 90 percent of the portfolio being acquired is concentrated in Cambridge, Massachusetts.

Following the completion of the transaction, Blackstone will become the largest life science office owner in Cambridge, and BioMed Realty, which will have an enterprise value of approximately $20 billion, will have two-thirds of its platform concentrated in the Boston/Cambridge market.

Cambridge is one of the fastest growing lab office submarkets in the country due to its adjacency to world-leading academic institutions and the largest cluster of pharmaceutical companies in the U.S. The Cambridge portfolio is located in East Cambridge, directly adjacent to the Massachusetts Institute of Technology, and is leased to blue-chip tenants.

NADEEM MEGHJI

“This transaction illustrates Blackstone’s continued conviction in the life sciences space both broadly, and within real estate, investing in best-in-class assets located adjacent to top-tier research and education institutions,” said Nadeem Meghji, Head of Real Estate Americas.

“We look forward to continuing to grow the platform with the help of BioMed Realty, our world-class life science office platform, with the goal of delivering value to our long-term investors.”

This acquisition follows a number of other significant Blackstone investments in therapies and technologies in the life sciences space beyond the firm’s investments in real estate.

The firm launched Blackstone Life Sciences in 2018 to invest directly in promising medicines and technologies. In July, Blackstone raised the largest life sciences private fund to date, and the firm has also made major investments in Cryoport, a provider of temperature-controlled logistics solutions to the life sciences industry, and Precision Medicine Group, a leading next-generation provider of drug development and commercialization services.

Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are serving as financial advisors to Blackstone, and Simpson Thacher & Bartlett LLP is serving as legal advisor. Eastdil Secured is serving as lead financial advisor to Brookfield, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor. Citigroup Global Markets Inc. also provided financial advisory services to Brookfield in connection with the transaction.

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