Blackstone Real Estate Announces Acquisition of Premier Lab Office Portfolio from Brookfield Fund

Rhea-AI Summary

Blackstone (NYSE: BX) announced the acquisition of a 2.3 million square foot lab office portfolio from Brookfield Asset Management for $3.45 billion. This deal, expected to close in Q1 2021, will position Blackstone as the largest life science office owner in Cambridge, Massachusetts, where 90% of the portfolio is located. With this acquisition, BioMed Realty's enterprise value will rise to approximately $20 billion, consolidating two-thirds of its assets in the fast-growing Boston/Cambridge market. This move underscores Blackstone's commitment to the life sciences sector.

Positive

• Acquisition of a prime lab office portfolio for $3.45 billion enhances Blackstone's presence in the life sciences sector.
• The deal positions Blackstone as the largest life science office owner in Cambridge, increasing market dominance.
• Strengthens BioMed Realty's portfolio with an enterprise value of $20 billion and a focus on Boston/Cambridge.

Negative

• None.

Blackstone (NYSE: BX) today announced that Blackstone Property Partners Life Sciences (“BPPLS”) will acquire a best‐in‐class, 2.3 million square foot portfolio of lab office buildings from a Brookfield Asset Management real estate fund for $3.45 billion. BPPLS is Blackstone Real Estate’s long-term, perpetual capital, core+ return life sciences strategy that owns BioMed Realty, Blackstone’s life science real estate portfolio company. The transaction is expected to close in the first quarter of 2021 subject to customary closing conditions.

Approximately 90% of the portfolio being acquired is concentrated in Cambridge, Massachusetts. Following the completion of the transaction, Blackstone will become the largest life science office owner in Cambridge, and BioMed Realty, which will have an enterprise value of approximately $20 billion, will have two-thirds of its platform concentrated in the Boston/Cambridge market. Cambridge is one of the fastest growing lab office submarkets in the country due to its adjacency to world-leading academic institutions and the largest cluster of pharmaceutical companies in the U.S. The Cambridge portfolio is located in East Cambridge, directly adjacent to the Massachusetts Institute of Technology, and is leased to blue-chip tenants.

“This transaction illustrates Blackstone’s continued conviction in the life sciences space both broadly, and within real estate, investing in best-in-class assets located adjacent to top-tier research and education institutions,” said Nadeem Meghji, Head of Real Estate Americas. “We look forward to continuing to grow the platform with the help of BioMed Realty, our world-class life science office platform, with the goal of delivering value to our long-term investors.”

This acquisition follows a number of other significant Blackstone investments in therapies and technologies in the life sciences space beyond the firm’s investments in real estate. The firm launched Blackstone Life Sciences in 2018 to invest directly in promising medicines and technologies. In July, Blackstone raised the largest life sciences private fund to date, and the firm has also made major investments in Cryoport, a leading provider of temperature-controlled logistics solutions to the life sciences industry, and Precision Medicine Group, a leading next-generation provider of drug development and commercialization services.

Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are serving as financial advisors to Blackstone, and Simpson Thacher & Bartlett LLP is serving as legal advisor. Eastdil Secured is serving as lead financial advisor to Brookfield, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor. Citigroup Global Markets Inc. also provided financial advisory services to Brookfield in connection with the transaction.

About Blackstone Real Estate

Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has $174 billion of investor capital under management. Blackstone is one of the largest property owners in the world, owning and operating assets across every major geography and sector, including logistics, multifamily and single family housing, office, hospitality and retail. Our opportunistic funds seek to acquire undermanaged, well-located assets across the world. Blackstone’s Core+ strategy invests in substantially stabilized real estate globally through regional open-ended funds focused on high-quality assets and Blackstone Real Estate Income Trust, Inc. (BREIT), a non-listed REIT that invests in U.S. income-generating assets. Blackstone Real Estate also operates one of the leading global real estate debt businesses, providing comprehensive financing solutions across the capital structure and risk spectrum, including management of Blackstone Mortgage Trust (NYSE: BXMT).

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond Blackstone’s control, which may cause actual results to differ significantly from those expressed in any forward-looking statement. All forward-looking statements reflect Blackstone’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, Blackstone disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause Blackstone’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in Blackstone’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, and other risks described in documents subsequently filed by Blackstone from time to time with the SEC.

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FAQ

What is Blackstone's recent acquisition regarding the BX stock?

Blackstone announced the acquisition of a 2.3 million square foot lab office portfolio from Brookfield for $3.45 billion.

When is the acquisition by Blackstone expected to close?

The acquisition is expected to close in the first quarter of 2021.

How does this acquisition affect Blackstone's position in the life sciences market?

This acquisition positions Blackstone as the largest life science office owner in Cambridge, Massachusetts.

What is the strategic importance of the Cambridge portfolio for Blackstone?

The Cambridge portfolio, located near MIT and key pharmaceutical companies, is crucial for expanding Blackstone's life sciences real estate strategy.

What is the enterprise value of BioMed Realty after the acquisition?

Following the acquisition, BioMed Realty's enterprise value will be approximately $20 billion.