Blackstone to acquire life-sciences portfolio for $3.45B

2.3 million-square-foot portfolio is next to Massachusetts Institute of Technology

Blackstone’s Nadeem Meghji (Blackstone, iStock)
Blackstone’s Nadeem Meghji (Blackstone, iStock)

Blackstone Group has agreed to pay Brookfield Asset Management $3.45 billion for a life-sciences real estate portfolio located mostly in the Cambridge, Massachusetts, market.

The 2.3-million-square-foot portfolio of lab buildings is centered on a 30-acre campus next to Massachusetts Institute of Technology. More than 95 percent of the portfolio is leased thanks to strong demand from pharmaceutical and other life-sciences companies that want to be close to MIT students, the Wall Street Journal reported.

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The life-sciences sector has been one of the few bright spots for commercial real estate in the pandemic, as most office workers and would-be travelers continue to stay home. Life-sciences jobs often require special equipment and infrastructure, making it harder to work remotely.

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“You can’t create a new drug from your living room or kitchen. You need to be in physical lab space,” Nadeem Meghji, Blackstone’s head of real estate for the Americas, told the newspaper.

Prior to the Cambridge deal, Blackstone recapitalized BioMed Realty, the largest private owner of life-sciences property in the U.S., for $14.6 billion. The firm is also close to acquiring another two life-science buildings in the Boston-Cambridge market for $1 billion, according to people familiar with the matter, the Journal reported.

Even before the health crisis, Blackstone was one of the world’s leading investors in life-sciences real estate.

“The pandemic has only amplified the need for vital drug discovery and shined a light on the importance of innovation in life sciences,” Meghji said. [WSJ] — Akiko Matsuda