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Blackstone Buys $3.5B Lab Portfolio From Brookfield Fund

Blackstone will purchase assets totaling 2.3M SF in East Cambridge for $3.5B from Brookfield.

Blackstone is cementing its status as the life sciences industry’s biggest player, securing a marquee Cambridge portfolio for $3.45B.

The firm’s Blackstone Property Partners Life Sciences fund will buy a 2.3M SF portfolio of lab buildings from a Brookfield Asset Management fund, securing prime assets in the tight Kendall Square neighborhood, it announced Monday. The deal will make Blackstone the largest life sciences office owner in Cambridge, it said.

The Blackstone fund owns BioMed Realty, and the transaction, which is expected to close in the first quarter of 2021, will give BioMed an enterprise value of approximately $20B, Blackstone said. BioMed, which owns 11.3M SF of life sciences properties, was recapitalized earlier this year at a $14.6B valuation.

“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,” Blackstone Head of Real Estate Americas Nadeem Meghji said in a statement.

A representative for Brookfield didn't immediately return a request for comment. The location and tenants of the assets in the deal were not disclosed.

BioMed will have two-thirds of its platform concentrated in the Boston market, and 90% of the properties in the deal are in Cambridge. East Cambridge's 11.4M SF of lab space is over 99% occupied, according to Colliers' 2020 Q3 Lab Viewpoint Report. The continued demand in the market has driven prices skyward.

When Brookfield began exploring a sale of its life sciences holdings last month, it was estimated to fetch $3B, Bloomberg reported. Brookfield acquired the 2.3M SF life sciences portfolio two years ago in its $11.4B purchase of Forest City Realty Trust.

Blackstone has spent the past year focusing on life sciences investments, e-commerce distribution centers and streaming video company studios, which have been spurred by the coronavirus pandemic, while also winding down a $220M CMBS debt fund invested in retail and hospitality, which have been hit hardest.