Blackstone to buy 2.3 million square foot medical lab near MIT

Blackstone’s life sciences-focused real estate unit plans to purchase a 2.3 million square foot portfolio of lab office buildings from Brookfield Asset Management’s real estate fund for $3.45 billion. The transaction is slated to close next quarter and represents a sizable move into the Boston/Cambridge market that will make Blackstone the largest life science office owner in the area. Blackstone Property Partners Life Sciences is a distinct segment of Blackstone’s existing $174 billion real estate business in that it is a long-term, perpetual capital vehicle that is able to take on additional investor capital constantly. It also owns $20 billion BioMed Realty, which is Blackstone’s life science real estate portfolio company. "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 for Blackstone. "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." According to Blackstone, Cambridge is one of the fastest growing lab office submarkets in the country due to its adjacency to leading academic institutions and the largest cluster of pharmaceutical companies in the U.S. The real estate holdings are near the Massachusetts Institute of Technology and leased to blue-chip tenants. In October, Blackstone Real Estate Partners VIII LP and co-investors agreed to sell BioMed Realty for $14.6 billion to a group led by existing BioMed investors. Existing BioMed investors were offered the option to exit for cash or reinvest their proceeds from the sale. In total the investment, officials said, would generate $6.5 billion of cumulative profits for Blackstone’s BREP VIII and BioMed co-investors. BioMed is the largest private owner of life science office buildings in the U.S. In recent years, Blackstone’s focus broadly on the life sciences has grown with a focus on therapies and technologies. This new proposed 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 too. The firm launched Blackstone Life Sciences in 2018 to invest directly in promising medicines and technologies. In July, Blackstone raised $4.6 billion for its private equity fund. The final close of Blackstone Life Sciences V was not only oversubscribed — it was also the largest life sciences private fund to be raised to date, according to Blackstone officials. The firm said it had already invested and committed nearly $1 billion from the fund earlier the year, including deals with Alnylam, Reata Pharmaceuticals and Medtronic. Blackstone has also made major investments in Cryoport, a provider of temperature-controlled logistics solutions to the life sciences industry, and Precision Medicine Group, a provider of drug development and commercialization services.

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