Boston Properties Offloads 45% Ownership Share in Kendall Square Life-Sciences Portfolio for $1.66 Billion

In a strategic move, Boston Properties Inc. has finalized a deal to sell a substantial 45 percent stake in two cutting-edge life-sciences facilities, 290 and 300 Binney St., located in the vibrant Kendall Square area of Cambridge, Massachusetts. The deal, valued at a significant $1.66 billion, equates to an impressive rate of nearly $2,050 per square foot. Norges Bank Investment Management is the buyer in this substantial transaction.

Strategic Realignment: Boston Properties' Evolving Ownership Landscape

Despite parting with almost half of its stake, Boston Properties will maintain a 55 percent ownership in the dynamic duo of 290 and 300 Binney St. The strategic realignment includes the redevelopment of the 300 Binney building into a sprawling 240,000 square feet, fully leased to the prestigious Broad Institute, slated for occupancy in early 2025. Meanwhile, the construction of the 570,000 square feet 290 Binney building, occupying 16 floors, is underway and has secured full occupancy with AstraZeneca set to move in by April 2026.

Financial Commitments: Navigating Development Costs and Returns

The ambitious redevelopment of the 300 Binney building is expected to cost Boston Properties a total of $205.3 million, while the construction of the 290 Binney building carries a substantial projected investment of $1.12 billion. As of now, the company has already injected $39 million into the 300 Binney project and a noteworthy $210.89 million into the 290 Binney construction. The sale to Norges Bank significantly alleviates Boston Properties of approximately $533.5 million in development spending.

Continued Management and Mutual Ventures with Norges Bank

Despite the change in ownership structure, Boston Properties will continue to manage both properties, ensuring a seamless transition. Norges Bank Investment Management, representing the Norwegian Government Pension Fund Global, has been a consistent partner with Boston Properties. This recent deal follows their joint venture in 2013, where Norges Bank acquired a 45 percent stake in three prominent Boston Properties-owned assets, including properties in Manhattan and Boston.

Longstanding Partnership Acknowledged by Boston Properties CEO

Expressing enthusiasm about the deal, Owen Thomas, Chairman, and Chief Executive of Boston Properties, emphasized the company's delight in deepening its longstanding partnership with Norges Bank Investment Management. The mutual commitment between the entities spans several significant ventures, marking a continued collaboration in shaping the landscape of commercial real estate.