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The Ventas Life Science and Healthcare Real Estate Fund has acquired a trophy life science portfolio in the South San Francisco life science cluster for $1 billion. The seller is Bain Capital Real Estate.
Ventas is the sponsor and general partner of the fund, which is a perpetual life vehicle focused on investments in core and core plus life science, medical office and senior housing real estate in North America.
The purchase price for the portfolio represents approximately a 5% capitalization rate on forward cash net operating income. The average escalator for the portfolio exceeds 3%. The seller is an affiliate of the partnership from which Ventas acquired 1030 Massachusetts Ave., in Cambridge, Mass., last year.
The portfolio, positioned at the entrance to the South San Francisco life science cluster, consists of a campus of three newly developed or renovated buildings totaling nearly 800,000 square feet. It is 96% leased with a weighted average lease term of over six years.
Nearly half of the tenant base consists of public companies averaging over $10 billion in market cap. They are a diverse group of early to-mid stage life science companies.
Bain Capital Real Estate and Phase 3 Real Estate Partners acquired the two office buildings and development site through two transactions in 2015 to create their flagship Genesis location in South San Francisco. The project is one of the submarket’s largest ready-to-occupy, amenity-filled life sciences campus.
“We are pleased to further expand our growing research & innovation footprint into the premier South San Francisco life science cluster with the acquisition of this outstanding lab portfolio,” said Debra A. Cafaro, Ventas Chairman and Chief Executive Officer. “Strong and growing capital flows into the life science sector are accelerating innovation and discovery. These flows support the demand for first class lab space in dynamic markets like South San Francisco.”
Ventas now owns or has an investment in over seven million square feet of research & innovation properties located in the life science clusters of Cambridge, South San Francisco, and on the campuses of over 15 top tier research universities, she added.
The Ventas Life Science and Healthcare Real Estate Fund has raised more than $1 billion of equity and more than doubled its assets under management to $1.8 billion, according to Cafaro.