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Blackstone headed for huge profit after agreeing $14.6bn BioMed realty sale

Blackstone headed for huge profit after agreeing $14.6bn BioMed realty sale

Blackstone has scored a hefty return by agreeing the $14.6bn sale of US life science office buildings major BioMed Realty.

The firm, which bought the company using its $15.8bn Real Estate Partners VIII in 2016, said the investment would generate $6.5bn of cumulative profits for BREP VIII and BioMed co-investors.

BioMed has an 11.3 million sq ft portfolio concentrated in innovation markets including Boston/Cambridge, San Francisco, San Diego, Seattle and Cambridge, UK.

Blackstone said it had transformed the company into a premier life science office company by concentrating the portfolio in core life science markets with strong growth potential, building a best-in-class management team, developing assets for investment grade tenants and stabilizing operations by increasing occupancy.

Kathleen McCarthy, global co-head of Blackstone Real Estate, said, “Life science is one of Blackstone’s highest conviction themes, and we have made a number of important investments in this space across the firm.

“In real estate, many of our investors are eager to maintain or increase their exposure to life science office, and this recapitalization enables them to do that with an extraordinarily high-quality company as well as a trusted partner in Blackstone.”

Nadeem Meghji, head of real estate Americas for Blackstone, said, “We have worked hand in hand with the world-class BioMed team to build the largest private life science office portfolio in the US located in the best markets.

“During our ownership, we have completed and commenced $3.3bn of best-in-class new developments and continue to cultivate an attractive future development pipeline. We are big believers in the life science sector broadly and BioMed in particular, and we look forward to continuing to grow the business over the long-term.”

Blackstone has launched a “go-shop” process on behalf of BioMed’s current investors, which will be led by Morgan Stanley & Co, who will solicit superior proposals.

The recapitalization is expected to close within five business days of the conclusion of the “go-shop” process.

Morgan Stanley & Co is serving as financial advisor to BREP VIII, and Eastdil Secured is serving as financial advisor to the purchasers. Simpson Thacher & Bartlett is serving as legal advisor to Blackstone.

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