A trio of Kendall Square buildings that are home to big-name drug companies just traded hands for one of the steepest prices ever seen in Boston’s office market.
Chicago-based investment firm Harrison Street Real Estate and Boston-based developer Bulfinch Cos. agreed to pay the investment arm of Massachusetts Institute of Technology $1.1 billion for a long-term lease on the three buildings — 610 Main Street, 700 Main, and One Portland Street in Cambridge.
The cluster of buildings, called the Osborn Triangle, is occupied by Pfizer, Novartis, and startup hub Lab Central, as well as a few smaller tenants. It sits in one of the hottest real estate markets on the East Coast, and was priced accordingly.
Financial terms were not disclosed, but sources familiar with the deal said Harrison and Bulfinch will pay $1.1 billion for a 90 percent stake in the 679,000-square-foot complex, which includes a 650-space parking garage. That sum, which equates to about $1,625 per square foot, would smash recent records for office building deals in Boston, which have generally topped out at around $1,000 a square foot. Earlier this year, Alexandria Real Estate Equities sold a majority stake in one of its new buildings on Binney Street in Kendall Square in a deal worth $1,880 per square foot. Harrison, MIT and real estate firm Newmark, which brokered the deal, all declined comment.
It was not clear Friday whether the new owners plan more development. While Bulfinch has developed several projects around the region, including lab space under construction in the Alewife area, this is Harrison’s first big deal in Boston. Executives with the firm, which specializes in education and health care real estate, said they’re happy to be in the market.
“Osborn Triangle is a one-of-a-kind complex serving as a global hub for the life science and innovation communities,” said managing director Mark Burkemper. “We are excited by the opportunities to continue to enhance this already thriving neighborhood.”
Formerly a parking lot and vacant building, the complex was developed over two decades by MIT, whose investment arm owns large swaths of ever-more-valuable real estate around its East Cambridge campus. The university will retain ownership, under a long-term lease, and continue to hold a minority stake in the buildings — a model MIT has used in other large real estate projects such as Technology Square and University Park.
“This is a great example of the positive impact that MIT’s investment in the area can have,” the school’s executive vice president and treasurer Israel Ruiz said in a statement.
MIT may funnel the proceeds into other real estate projects it’s developing around Kendall Square, such as a string of office and housing buildings under construction along Main Street near the Kendall Red Line Station, and the massive Volpe site that it’s planning to redevelop nearby.