Life Science Real Estate’s Biggest Deals of 2021
Any review of a record year in life sciences real estate revolves around the cold, hard – and often lucrative – fact that demand far outweighs supply.
Although full data for 2021 are not yet available, preliminary figures suggest a number of superlatives in terms of funding, construction and demand. Venture capital investments, well on the way to surpassing last year’s record of $ 33.1 billion, have put tremendous pressure on to meet growing demand for laboratory space across the country.
Despite the speculative development of 21 million SF laboratory space, start-ups and biotech companies are currently looking for 23.8 million SF space. This has led to competition for space at all levels and an incentive for developers to spend exorbitant sums on development sites and remodeling projects to get products to market faster. As the deals below suggest, this has resulted in a sharp rise in prices in top markets like Cambridge and Boston that shows no signs of flattening.
Courtesy Newmark
The Cambridge Highlands Campus in the Alewife neighborhood.
Kendall Square Alternative sees another major campus conversion
Buyers: Healthpeak properties
Seller: Clarion partner
price: $ 180 million
market: Boston
Healthpeak Properties, one of the top three national life science developers, has made extensive resources available in Alewife, part of West Cambridge, that will become its own laboratory and life sciences nexus. This contract for four buildings for the Cambridge Highlands Campus, including laboratory, office and Raytheon facilities, followed the purchase of nearby Cambridge Discovery Park for $ 720 million in December.
The company has been so aggressive in getting real estate in Alewife that it inspired local lawmakers to consider a moratorium on laboratory development.
Chinatown Office Sale comes with a big price tag for lab conversion
Buyers: Nan Fung real estate partner
Seller: Lincoln Property Co. and ASB Real Estate Investments
price: $ 210 million
market: Boston
Hong Kong-based Nan Fung made one of its most expensive acquisitions in an exciting year in the greater Boston area, acquiring a relatively new 210,000 SF Chinatown office building in view of the lab remodel. While the immediate plans for the property at 60 South Street were not clear at the time of the sale in August, the tower joins and locates a number of buildings in the Boston area, including the former headquarters of John Hancock Insurance second life via biotechnology.
Courtesy City Center Realty Partners
A representation of the proposed laboratory space and outdoor facility at 5959 Shellmound St. in Emeryville
Oxford grabs Bicoastal portfolio
Buyers: Oxford Properties Group
Seller: Angelo Gordon and City Center Realty Partners
price: $ 276 million
market: Boston / San Francisco
The Toronto-based investment firm took a bold move and started its life sciences business with a deal that included a trio of Boston real estate and the Public Market Emeryville, a mixed-use development near Oakland with extensive laboratory components. The company announced it would invest an additional $ 500 million in the sites.
Longfellow Lands San Diego Megacampus
Buyers: Longfellow real estate partner
Seller: PS business parks
price: $ 315 million
market: San Diego
This purchase of a portfolio of nine office buildings spanning 20 acres in Sorrento Mesa, intended as the first step in building a large campus near centers of excellence such as the Salk Institute, is just part of Boston developer Longfellow’s plans for San Diego. After a busy year of additional acquisitions in the region, the company now controls $ 1.3 million with $ 1 million in the development pipeline, according to the San Diego Business Journal.
Google Maps
The BEAT in Dorchester under construction in November 2020.
The great story of the former newspaper office: Laboratory conversion
Buyers: Nordblom Co. and Beacon Capital Partners
Seller: Alcion Ventures
price: $ 362 million
market: Boston
Classic newspaper office buildings may unfortunately be too big for modern editorial offices, but their expansive floor slabs and ceilings make them ideal candidates for conversion into a laboratory.
And so the Boston Globe house on Morrissey Boulevard was sold to developers this year as it becomes a combined campus for life sciences, medicine, and technology. Nordblom Co. and Beacon Capital Partners, which bought private equity partner Alcion Ventures for the SF 700,000 project, saw promise in capitalizing on the larger trend of office-to-laboratory conversions attempting to supply a space-hungry market in the greater Boston area.
Chicago firms are targeting the San Diego Lab campus
Buyers: Sterling Bay
Seller: City Office REIT
price: $ 576 million
market: San Diego
Chicago-based developer Sterling Bay, best known for technology and office development in the city’s bustling near-west, has taken numerous steps this year to ensure it is also taken seriously as a player in the life science sector will. This strategic purchase of a building portfolio that makes up City Office REIT’s entire life science portfolio is located in the Sorrento Mesa submarket of San Diego, a growing area that also has an ARE campus in the works.
Courtesy Biocom California
Rendering of the Genesis Marina project in San Francisco.
Record-breaking Cambridge sale sets new price cap
Buyers: Alexandria real estate stocks
Seller: The Davis Cos. and Principal Global Investors
price: $ 815 million
market: Boston
When two properties in East Cambridge, One Rogers Street and One Charles Park, sold for $ 468 million in December 2020, it was a blockbuster. Six months later, its price has almost doubled to $ 815 million. The aggressive purchase of Alexandria, which strengthens its position in the country’s premier life sciences market, demonstrated that even with soaring development in the greater Boston area, the price tag means that properties near Kendall Square are still incredible Can earn rewards.
Dropbox HQ offers tremendous opportunities for SF Life Sciences
Buyers: KKR
Seller: Kilroy Realty Corp.
price: $ 1.1 billion
market: San Francisco
There has been much speculation about converting office space that was left empty during the pandemic into laboratory space. Often it is left at that, as different uses require different floor heights, technology and floor plans. Fortunately for KKR, the Dropbox headquarters in downtown San Francisco was originally built as a speculative laboratory development, meaning the 12-story, SF 750,000 lot is full of leasing opportunities. Dropbox’s decision to go completely remotely opened up prime space for new biotech startups.
The 401 Park Drive building in the Fenway neighborhood of Boston is part of Alexandria’s $ 1.5 billion deal in January.
Alexandria’s Fenway pickup truck outside the park
Buyers: Alexandria real estate stocks
Seller: Samuel & staff
price: $ 1.5 billion
market: Boston
It is only fitting that the list of the year’s largest life sciences deals of two blockbusters in Boston is drawing to a close, the first being the early January acquisition of Alexandria Life Science Equities of 401 Park Drive and 201 Brookline Ave. by Samuel & Associates, which is 1.8. makes up M SF rentable area. It was a groundbreaking deal for a record year for life science real estate investments and touched many of the big themes of the year: expansion by all means and prices in the Boston market and the incredible year-round returns Alexandria realized what it was in the Able to make huge purchases like this one.
Blackstones Blowout Cambridge Deal
Buyers: Blackstone Property Partner Life Sciences
Seller: Brookfield Asset Management
price: $ 3.4 billion
market: Boston
The numbers behind this transaction are pretty staggering: SF2.3 million, 97% of which in Cambridge, the nexus of life sciences and laboratory space, as well as financial and legal advice from eight top firms including Citigroup, Deutsche Bank, Wells Fargo and Morgan Stanley. The size of this transaction underscored how much capital is being used to conquer laboratory space in one of the country’s innovation capitals. Many trends shaped the year in biotech real estate, but the sheer amount of money pouring into labs from top institutional investors shows how much more lucrative this sector has become.