Clarion Partners Closes on Cambridge Life Science Complex
- Oct 05, 2016
Cambridge, Mass.—Noting that Boston has performed well post-recession in part because of the technology and healthcare companies located there, Clarion Partners has acquired 245 First St., a two-building, Class A office and life science complex in East Cambridge, Mass., for $311.3 million.
The New York City-based real estate investment management firm said it purchased the complex in the heart of the East Cambridge/Kendall Square submarket on behalf of a commingled fund that it oversees. The seller was Jamestown, an Atlanta-based real estate and investment firm that bought the two buildings in 2013 for $192.6 million, according to the Boston Business Journal.
“245 First Street is a well-located, well-leased asset in a highly desirable submarket,” Gary Rufrano, head of Clarion Partners’ acquisition team for the property, said in a prepared statement. “Given opportunities to purchase high-quality office and lab space in East Cambridge are extremely scarce, and because of the incredible tenant demand in the vicinity, evidenced by extremely strong occupancy of the property over the last ten years, we believe that this property will be an excellent addition to our Boston portfolio.”
The property comprises a six-story, 134,175-square-foot life science facility and a nine-story, 170,714-square-foot office tower constructed above a parking garage. The buildings are linked by a four-story glass atrium with a common lobby and on-site café. Other amenities include bike storage, lockers and a shower room. The asset was 96 percent leased at the time of sale, to tenants in the biotechnology and medical research industries. It is located directly across the Charles River from downtown Boston, close to public transit and numerous research institutions, teaching hospitals, technology and life science firms. The 168-acre MIT campus is located in the submarket and Harvard University is one mile away.
Clarion Partners noted that more than 52 percent of all lab space in the market is located in the area surrounding 245 First St. Driven by the healthcare and technology firms, Boston’s total employment is 7.6 percent above the prior peak and the unemployment rate was 3.7 percent at the end of May, lower than both the state and national averages.
In its bioSTATus Mid-Year 2016 report on the Boston Lab Market, Transwestern stated the Cambridge area “continues to be one of the hottest real estate markets nationally” and also has seen “explosive growth over the last decade.”
Transwestern stated that availability in the East Cambridge submarket was at 2.7 percent at mid-year, “marking the sixth consecutive quarter of availability less than five percent.” Overall, the Cambridge market had availability at 2.2 percent. The report noted 1.2 million square feet of space is under construction in East Cambridge, but it is already 80 percent preleased.
Clarion Partners has more than $42 billion under management and more than 200 institutional investors, both domestic and international. The firm, which has offices in Boston as well as Atlanta, Dallas, London, Los Angeles, Manhattan, Sao Paulo, Seattle and Washington, D.C., sold two interconnected 13-story office buildings in Boston at 535-545 Boylston St. to John Hancock Real Estate for $100.5 million in August.