Oxford Properties Group (“Oxford”), a leading global real estate investor, asset manager and business builder, and J.P. Morgan Global Alternatives, today announced the sale of One Memorial Drive—a fully leased, 409,422 square foot Class A office building in Cambridge, MA—for US$825.1 million. The property was acquired by a joint venture between MetLife Investment Management and Norges Bank Investment Management.
The transaction, which values the property at over US$ 2,000 per square foot, sets a record benchmark for office product pricing in the Boston region. Attracting an array of bids across institutional, private equity and REIT capital, it reveals the depth of demand for well let, high-quality office product among institutional investors. Originally purchased by Oxford and institutional investors advised by J.P. Morgan Global Alternatives in 2014 as part of a multi-asset office portfolio, One Memorial Drive—primely located next to MIT’s campus—is 100% leased to technology companies Microsoft and InterSystems.
In 2017, Oxford increased the lettable area of the building by over 10% by converting an entire floor of underutilized parking space into office space which was then leased to InterSystems. Long-term renewals were also secured with the building’s occupants to drive net operating income over 55% higher than at acquisition.
Supporting its global capital allocation strategy, in recent years Oxford has increased its weighting to the life sciences, logistics and residential sectors across the globe. These asset classes now make up 37% of Oxford’s U.S. AUM, and are targeted to account for approximately 45-60% of its global AUM by 2025.
This year, Oxford has acquired six life sciences assets in the U.S. accounting for more than US$1.2 billion in deployed capital including development opportunities. They include three fully leased Boston-area properties, supplementing Oxford’s existing lab and innovation space in the market at 645 Summer Street. Oxford is also currently engaging with the community around its plans to develop a 350,000 square foot life science research and development building at 125 Lincoln in downtown Boston.
Oxford continues to substantially grow its U.S. logistics business, and recently announced it had agreed terms to acquire a 149 building, 14.5 million square foot light industrial portfolio across 12 U.S. markets from KKR for US$2.2 billion. The portfolio is comprised of high-quality distribution buildings primarily located in urban infill locations, and complements Oxford’s existing U.S. big box logistics platform, IDI Logistics.
To support its aim to build a portfolio of 15,000 multifamily units in the U.S. by 2025, Oxford has made a spate of residential acquisitions across the Sunbelt region this year, including 1,200 units across three properties in Austin and Phoenix.
Source : Oxford Properties