A joint venture between Tishman Speyer and Bellco Capital closed on the largest real estate fund exclusively for life sciences.
Breakthrough Properties raised $3 billion in direct capital and co-investments for its Breakthrough Life Science Property Fund, doubling its initial target. According to CBRE and JLL Research, it’s the largest life sciences real estate fund ever, excluding recapitalizations of existing portfolios.
The fund raised money from institutional investors, sovereign wealth funds and wealthy individuals. The venture will use the funds to scale its life sciences efforts, which already spans 4.6 million square feet in the development pipeline in the United States and abroad.
“We look forward to putting these resources to work in support of the next generation of critical discoveries,” Breakthrough CEO Dan Belldegrun said in a prepared statement.
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Boston, San Francisco lead surging life sciences market
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NYC hit record life science leasing in 2021
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Among Breakthrough’s developments are a 10-acre, 515,000-square-foot campus in San Diego and a property in Boston fully leased to CRISPR Therapeutics and expected to open this year.
Life sciences real estate has been one of the hottest property sectors during the pandemic, as employees can’t rely on remote and hybrid working environments.
A December report from CBRE found demand for U.S. lab space hit a record high while the vacancy rate fell to a mere 4.9 percent. Demand for lab space increased by 19.7 percent over a six-month period.
Boston-Cambridge is the biggest market in the sector, but life sciences is on the rise in New York City too. Tenants leased 433,000 square feet in 2021, according to CBRE, a record amount that nearly tripled the sector’s leasing from 2020 and surpassed all of the leasing in the sector of the previous seven years combined.
The average asking rent on triple-net life sciences leases in Manhattan was $114 per square foot last year, up $3 year-over-year, while the availability rate for ready-to-use lab space dropped to 3.3 percent.