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CMA
December 15, 2017  

BioMed Seeking $1.9 Billion Loan

Blackstone is in the process of lining up a $1.9 billion loan on a pool of office and laboratory properties owned by its BioMed Realty division.

Continuing its step-by-step refinancing of the massive BioMed portfolio, Blackstone is seeking floating-rate debt on 3.9 million square feet of space in various locations across the country. The fund giant is taking bids directly, without a broker, for a package with either a five- or seven-year term. The initial round of quotes from lenders was due today.

The collateral, comprising 27 properties, appears to represent most or all of the BioMed properties that Blackstone hasn’t already refinanced this year. The largest are Pacific Research Center, a 1.4 million-sf, multi-tenant research park at 7333-7999 Gateway Boulevard in Newark, Calif., and a 417,000-sf building at 301 Binney Street in Cambridge, Mass. There are additional properties in Cambridge and other concentrations in San Francisco, San Diego and Seattle.

New York-based Blackstone paid $8 billion for BioMed in January 2016, acting via its Blackstone Real Estate Partners 8 fund. It subsequently obtained some $5 billion of mortgages backed by various portions of the San Diego REIT’s 18.8 million sf of properties leased to life-sciences tenants.

Citigroup and Goldman Sachs originated $3 billion of that debt, divided into two components: a $1.8 billion fixed-rate loan, with a five-year term, on 31 properties (Pool A) and a $1.2 billion floater, with a two-year term and three one-year extension options, on another 28 properties (Pool B). The banks securitized the $1.8 billion senior portions of the two loans in a stand-alone offering (CGGS 2016-RND).

The bulk of the collateral for the proposed new loan is in Pool A of the Citi-Goldman package. Starting in February, the $1.15 billion of securitized senior debt on that pool can be prepaid without penalty.

Since June, Blackstone has refinanced most or all of the other BioMed properties, including much of the Pool B collateral. The new loans include:

$1.3 billion originated by Citi, Deutsche Bank and Barclays on 15 lab/office properties in Massachusetts and California encompassing 2.2 million sf. The $825 million senior portion was securitized (CGDBB 2017-BIOC).

$840 million originated by Morgan Stanley on the 704,000-sf Center for Life Science in Boston. The bank securitized the $700 million senior portion (MSC 2017-CLS).

$465 million from Citi and Deutsche on 18 properties encompassing 1.4 million sf. They securitized the $330 million senior piece (CGDB 2017-BIO).

$373 million from Goldman on the 349,000-sf office/R&D building at 500 Kendall Street in Cambridge. Goldman securitized the $334 million senior piece (GSMS 2017-500K).

$295 million of debt from Deutsche on the 303,000-sf building at 675 West Kendall Street in Cambridge.