Loving life (science)
Blackstone is so fond of offices that cater to biomedical research – and the returns they generate – it has opted to recapitalize its biggest investment in space for a long hold. The New York-based firm intends to buy BioMed Realty Trust, a life science office company, from one of its opportunistic funds, Blackstone Real Estate Partners VIII, for $14.6 billion. Kathleen McCarthy, Blackstone’s global co-head of real estate, said it plans to roll the platform into a new and sector-specific, open-end fund targeting core-plus returns.

Here is what you need to know about the mammoth transaction:

• Exit strategy: Blackstone weighed an IPO and private-to-private sales before opting for the recap.
• Investor driven: BREP VIII investors and co-investors were keen on the investment, PERE understands. They were given the option of walking away with their share of the profits or entering the new fund. Some even kicked in additional capital.
• Speaking of profits: Blackstone says the deal will generate $6.5 billion for the fund’s investors and co-investors.
• Fiduciary duty: Morgan Stanley was hired to shop BioMed around to make sure the recapitalization price is the best available. Technically, a better offer could still be made.
• Pandemic bump: While covid-19 has kept many offices quiet, BioMed’s properties have been lively with tenants working on tests, treatments and vaccines for the virus.
• Maturing industry: A decade ago, research labs were an ugly duckling for investors, seen as costly to outfit and risky given the uncertain finances of laboratory startups. Now, backed by venture capital and private equity, life science research and development is arguably the most crucial field to a global recovery.
• Concentration: Growth of this industry has centered on three key markets: Boston, the San Francisco Bay Area and San Diego. Through BioMed, Blackstone has large portfolios in all three metros, along with exposure to emerging secondary markets such as Seattle, New York and Cambridge, UK.

Bain Capital Real Estate capitalized on the strong demand for life science property – from tenants and investors alike – by selling a three-building campus in South San Francisco to Ventas, a Chicago-based REIT, last week for $1 billion. Brookfield is also reportedly considering the sale of a $3 billion life science portfolio [Bloomberg’s coverage here]. Check back later this week for an in-depth dive into this burgeoning sector.

Coming to America
Two years ago, Jim Barry, BlackRock’s real assets head, spoke of the firm’s ambitions to build a much bigger property business and double the platform’s $24 billion in assets under management in three to five years. He also said one “strategic gap” in BlackRock’s real estate business was in US value-add commingled funds, since it previously only raised and invested capital for the strategy through separate accounts. BlackRock, the world’s largest asset manager with $7.8 trillion in AUM, is now taking a big step forward in that expansion plan with the launch of its first North America-focused value-add real estate fund. Our coverage here.

Good morning, Vietnam
Logistics powerhouse GLP has kickstarted its expansion into South-East Asia with a 50-50 joint venture with Vietnam-based SEA Logistic Partners targeting up to $1.5 billion of assets. The new partnership has already secured three development projects in Vietnam’s two largest metros, Hanoi and Ho Chi Min City. The move is part of GLP’s rapid expansion plan as it has been venturing into new markets and businesses – including private equity and adjacent sectors – over the past two years.