BioMed Completes $343M Purchase of Cambridge Office/Lab Buildings
- Dec 15, 2011
December 15, 2011
By Scott Baltic, Contributing Editor
BioMed Realty Trust of San Diego has entered into a definitive agreement to acquire, for approximately $343 million, Prudential Real Estate Investors’ remaining 80 percent interest in two laboratory/office buildings and two other properties, all in the Rogers Street area of Cambridge, Mass., BioMed announced Tuesday. BioMed had acquired a 20 percent interest in the properties in April 2007 concurrent with a joint venture with PREI.
The buildings comprise two adjacent laboratory/office facilities at 301 Binney Street and 320 Bent Street, as well as the nearby Kendall Crossing Apartments and the Binney Street Garage.
BioMed chairman and CEO Alan D. Gold called the Rogers Street area “the center of the most vibrant life science market in the world today.”
The 301 Binney Street property is a state-of-the-art research facility with about 417,300 rentable square feet of office and laboratory space. Tenants include Ironwood Pharmaceuticals, the Broad Institute and Living Proof Inc. The property is about 74 percent leased, including Ironwood’s new 21,700-square-foot lease expansion signed in October, which brought the company’s total space in the building to about 210,300 square feet.
The 320 Bent Street research facility comprises about 184,400 rentable square feet of laboratory and office space, which is 79 percent leased to Merck & Co.
To put those occupancy figures in context, BioMed spokesman Rick Howe told Commercial Property Executive that although many of the REIT’s buildings are 100 percent leased, portfolio-wide the average occupancy for this somewhat specialized space is 80 to 85 percent. Typical buildouts in BioMed’s portfolio are 40 percent office space, 60 percent laboratory, Howe explained.
The seven-story, 37-unit Kendall Crossing Apartments are 100 percent leased, as is the 4,600 square feet of retail space on the first floor.
The Binney Street Garage has about 500 spaces for use by tenants of the other three buildings.
Excluding closing costs, the aggregate amount BioMed anticipates paying to or on behalf of PREI to fully acquire the latter’s interest in the four properties is approximately $308 million. The REIT will also contribute about $35 million to repay its portion of the secured acquisition and interim loan allocated to the Rogers Street properties.
BioMed will use cash on hand and draw on its unsecured line of credit to fund the $343 million total cash required for the transaction. Following the transaction, the Rogers Street properties will be fully unencumbered.
The REIT, which specializes in serving the life science industry, owns or has interests in properties totaling about 12.4 million rentable square feet, primarily in the major U.S. life science markets of Boston, San Francisco, Maryland, San Diego, New York/New Jersey, Pennsylvania and Seattle. Its tenants include biotechnology and pharmaceutical companies, scientific research institutions, and government agencies.