Argosy Real Estate Partners Invests in Boston Life Sciences Portfolio
On November 21, 2017, Argosy Real Estate Partners IV, L.P. and its parallel funds (“AREP IV”), in joint venture with Spaulding & Slye Investments, acquired a three-building office/laboratory portfolio totaling 122,600 square feet located in suburban Boston. The portfolio consists of a 92,000 square foot office/laboratory building and a two-building office/laboratory campus totaling 30,600 square feet. The portfolio was acquired off-market from a corporate owner/user at a favorable cost basis and at a significant discount to replacement cost.
The business plan is to capitalize on the significant shortage of available space in the Boston life sciences market and offer prospective tenants a move-in ready, high-quality space that can house a combination of manufacturing, laboratory and traditional office space. The properties were robustly built featuring flexible floorplates, Class A laboratory and cGMP manufacturing fit-out with state-of-the art building infrastructure and equipment. The assets are well-located within close proximity to suburban Boston life sciences clusters. The low acquisition basis will enable the partnership to lease the buildings at competitive rents with new tenants benefiting from the value of the existing infrastructure and in-place equipment.
The Boston metro is the largest life sciences cluster in the U.S., accounting for more than 25 million square feet of total life science inventory. The suburban Boston laboratory market is experiencing a significant supply/demand imbalance due to the limited availability and high cost of laboratory space in the urban core, the suburbs’ geographic proximity to decision-makers for later-phase biotech companies, the ease of access for commuters, and the availability of larger floorplates that caters to growing manufacturing requirements faced by many Cambridge-based life sciences companies.
The Boston Life Sciences Portfolio has been acquired in partnership with Spaulding & Slye Investments (“SSI”), a Boston-based real estate owner/operator founded in 1966. In 2006, SSI merged with JLL, one of the world’s largest real estate services and investment companies. SSI has substantial experience executing similar value-add strategies in the life sciences sector in Boston and other markets.