BioMed Realty, a subsidiary of Blackstone, has acquired a ground lease for a two-building life sciences complex in Kendall Square, Cambridge, for $361.5 million. This 223,000 square-foot property includes The Engine, an MIT-affiliated accelerator focused on robotics and climate technology, and will remain under MIT ownership until the end of the century.

The acquisition is significant, especially as the life sciences market has experienced a slowdown, with fewer property transactions compared to previous years. The deal, which translates to over $1,621 per square foot, highlights the premium nature of real estate in this area, known for its proximity to leading institutions like MIT and Harvard.

To finance the purchase, BioMed secured a $181 million loan from investors including AIG and Fidelity. Despite a quieter market, BioMed continues to be active, with ongoing development of a 16-story facility for Takeda Pharmaceuticals nearby.

Under the terms of the deal, MIT will retain ownership of the land, while BioMed Realty will hold a master lease for the complex. The Engine, which has been operational in the larger building since two years ago, will continue to provide lab and office space for startups and innovative projects emerging from MIT.

The broader life sciences market has seen a notable decline since its pandemic peak. Reports indicate that only three life sciences properties have been sold nationwide in the first nine months of the year, a stark contrast to the $1.8 billion in sales across 20 transactions in 2022 and $6.2 billion across 62 sales in 2021. This trend suggests a more cautious investment climate in the sector.

In summary, BioMed Realty's acquisition in Kendall Square underscores the area's importance in the life sciences landscape, even as the market faces challenges. Kendall Square remains a key hub for biotech and life sciences, bolstered by its connections to prestigious academic institutions and ongoing developments, such as Boston Properties' projects for AstraZeneca.