BXP Closes Sale of Minority Interest in Life Science Building

March 26, 2024

Investment Boston Development Featured More News Northeast Office

The transaction reduces the company’s development cost by upward of $500 million.

BXP has completed the sale of a 45 percent interest in 290 Binney St., a life science development in Kendall Square in Cambridge, Mass., to Norges Bank Investment Management.

NBIM’s investment reportedly will reduce BXP’s share of the project’s estimated development cost over time by about $533.5 million.

290 Binney St. is a 16-story, 570,000-square-foot laboratory/life science property that’s currently under construction and 100 percent preleased to AstraZeneca. Initial occupancy is expected in April 2026.

The consummation of this joint venture, according to BXP, completes NBIM’s two-building investment in Cambridge with a gross valuation of about $1.66 billion or $2,050 per square foot. The two properties, 290 Binney St. and 300 Binney St., total 810,000 square feet and are each fully preleased.

BXP is retaining a 55 percent interest in the joint ventures and also provides development, property management and leasing services for them. NBIM funded about $212.9 million at closing for its investment in 300 Binney St. in late 2023.

BXP first announced its intention to sell a 45 percent share in the project last November.

BXP Life Sciences’ portfolio totals about 3.9 million square feet, primarily in such life science hubs as metro Boston; Montgomery County, Md.; South San Francisco and Los Angeles.

Boston’s softening life science market

Metro Boston’s life science market entered the year “with record amounts of available lab space on both the secondary and direct markets,” according to a winter/spring 2024 report from Cresa.

Product deliveries have swollen the region’s inventory by 32 percent, year-over-year, with most of that space in the inner suburbs and Route 128 west submarkets. In all, there’s about 12 million square feet of lab space under development, about one-third of which is expected to deliver this year.

“With demand down and supply up, pricing pressure has eased significantly, dropping by nearly 8 percent year-over-year across the market and by nearly 12 percent in Cambridge alone,” Cresa reports. “It is, without question, a tenant’s market through and through.”

In January, a joint venture of BXP and J.P. Morgan Global Alternatives signed a 115,382-square-foot lease with DoorDash at 200 Fifth Ave., in Manhattan. The tenant thus doubled its space at the building, after its move in March 2023. Cushman & Wakefield represented both parties to the lease.