On Thursday, Canada’s Pension Plan Investment Board (CPP Investments), which manages nearly $500 billion in assets on behalf of more than 20 million Canadian pension contributors and beneficiaries, announced a new joint venture with Greystar Real Estate Partners, a South Carolina-based real estate investor known primarily for its development of rental homes, with a global real estate portfolio of some $220 billion. This new venture is something of a departure for both partners, focusing on the development of life science real estate in selected U.S. markets.
CPP Investments and Greystar committed $1.2 billion in initial equity to the joint venture, which will develop Class-A life science office and lab buildings in leading U.S. life science markets. Greystar will develop and manage the portfolio on behalf of the venture. As part of the new platform, the joint venture has acquired 74M, an office and lab development project in Somerville, Massachusetts. CPP Investments will own 90 percent of the project, and Greystar will own the remaining 10 percent.
“The U.S. life sciences sector continues to grow and evolve, with increasing demand for purpose-built lab and office space that is designed to market leading technical specifications,” said Peter Ballon, Managing Director, Global Head of Real Estate, CPP Investments. “The acquisition of 74M expands our global life sciences strategy into the U.S. market and provides a solid foundation to this new program with Greystar, a top-tier partner with a proven development track record.”
The recently acquired 74M is a 468,000 square-foot, 18-story office and lab development located in a vibrant live-work community in close proximity to East Cambridge, the world’s leading life science and technology cluster. The property is expected to achieve LEED Platinum and WiredScore Platinum certifications. Construction on the project is targeted to begin in calendar year 2021 and will be managed by Greystar.
“The investment management and development platform Greystar has built in the U.S. is unmatched, and the opportunities in life sciences offer another sector where we can build an in-house team of experts and help match the supply with the demand,” said Greystar Founder, Chairman and CEO Bob Faith. “We look forward to partnering with CPP Investments not just on our acquisition of 74M, but in other research clusters across the country where people want to live and work and where we can draw upon our local expertise.”
Earlier this week, CPP announced a separate real estate investment joint venture with international property and investment group Lendlease. The jointly held (50-50) alternative investment fund will develop Phase I of part of the Milano Innovation District (MIND), located on the site of the former 2015 World Expo, and planned as a life sciences and technology-anchored development of more than 1 million square meters in surface area.
