- BioMed Realty, a Blackstone affiliate, acquired a ground lease for a two-building, 223 KSF complex in Kendall Square for $361.5M.
- The property houses The Engine, MIT’s spinout accelerator focused on robotics and climate tech, and will remain on MIT-owned land under a master lease until the end of the century.
- The acquisition comes amid a slowdown in the life sciences market, which has seen fewer property trades than in recent years.
According to The Real Deal, Blackstone affiliate BioMed Realty has made a notable move in the life sciences sector, purchasing the ground lease of a key property in Cambridge’s Kendall Square for $361.5M.
Deal Details
The two-building complex, located at 730-750 Main Street, spans 223 KSF and is home to The Engine, an MIT spinout accelerator focused on high-tech and climate innovation. The $361.5M deal breaks down to over $1,621 PSF, a significant valuation that underscores the area’s premium real estate.
The property, purchased from MIT, reflects BioMed’s strategy to bolster its life sciences presence in the Greater Boston area, a hub for biotech and innovation. The complex’s proximity to both MIT and Harvard makes it highly attractive, bolstering Kendall Square’s reputation as a leading destination for life sciences companies.
To finance the acquisition, an affiliate of BioMed secured a $181M acquisition loan from AIG, Fidelity, and other investors. Despite its recent quiet period in the region, BioMed remains a major player, currently developing a 16-story property for Takeda Pharmaceuticals in the same neighborhood.
Long-Term Lease
MIT will continue to own the land under the complex, and BioMed Realty’s master lease will run until the end of the century.
The Engine, which set up operations at the larger building at 750 Main Street two years ago, will continue to occupy the space, providing lab and office space for startups and innovative projects emerging from MIT.
Science Slowdown
Despite BioMed’s new acquisition, the broader life sciences market has slowed considerably since its pandemic peak.
According to CommercialEdge, only three life sciences assets have changed hands nationwide in the first nine months of the year. This is a steep drop from the $1.8B across 20 sales in 2022 and the $6.2B across 62 sales in 2021, indicating a more cautious investment climate in the sector.
In Summary
BioMed Realty’s latest acquisition in Kendall Square reaffirms the location’s vital role in the life sciences landscape, even as the sector navigates a cooler investment environment.
Kendall Square remains a hotspot for life sciences and biotech, fueled by its connections to leading academic institutions. The area has been a focal point for new lab developments, including Boston Properties’ ongoing efforts to construct space for AstraZeneca.
