By Jon Peterson
Massachusetts Pension Reserves Investment Management Board (Mass PRIM) has approved a $200 million commitment into a co-investment of a large life science portfolio that is owned by New York-based Blackstone, according to a statement made by the pension fund in a board meeting document.
This investment is subject to the pension fund completing its due diligence. Mass PRIM stated in an email that it could not comment beyond the board meeting document, since it signed a non-disclosure agreement with Blackstone, and this transaction has not closed yet. Should this transaction close, it would represent the first real estate investment that the pension fund has made with Blackstone.
Blackstone declined to comment when it was contacted for this story. The name of the co-investment is Blackstone Property Associates. The Mass PRIM board meeting document stated that the properties are located in the primary life science markets most attractive to major tenants. It does not state, however, where the assets in the portfolio are located. These locations, coupled with a high-quality asset and tenant base and supported by positive secular trends in life science, mitigate future vacancy and credit risk.
The board meeting document does state that the two largest life style clusters in the United States are San Francisco Bay Area and the Boston/Cambridge market. Other established clusters include San Diego, Seattle, New Jersey, Raleigh/Durham and Washington, D.C./Baltimore.
Mass PRIM wrote in a board meeting document that the life science industry is poised to benefit from a continued increase in demand, and it anticipates that as the population ages there is going to be a greater need for pharmaceuticals and medical devices. The “Baby Boomer” generation is the largest age cohort in the United States, and by 2029, all Baby Boomers will be aged 65 or older. Technology is accelerating advancement in healthcare, and this is expected to increase the need for R&D space, diagnostic centers and healthcare facilities.