It was a great catch for BioMed as Wexford's operating portfolio was tenanted by research facilities at some of the US' top academic and medical universities, including the University of Pennsylvania Health System, Washington University in St. Louis, Wake Forest University, the University of Maryland, the University of Miami, Old Dominion University, the Illinois Institute of Technology and Penn State University.

Approximately $551 million of the initial consideration (the deal was first valued at $640 million) was for this portfolio, with the remaining $89 million for the 935,000 square feet of space under construction at three projects at that point in time. Those projects were anchored by the University of Pennsylvania Health System, Wake Forest University and Washington University in St. Louis.

Going Private

Two years later, towards the end of 2015, rumors began to circulate that Blackstone was acquiring BioMed Realty, including of course, the Wexford assets. Sure enough these rumors proved to be true--Blackstone Real Estate Partners VIII went on to make an all cash offer of $23.75 per share for the life sciences REIT, representing a 24% premium over its closing price on Sept. 22, when the rumors first emerged.

At the time BioMed CEO Alan Gold said that while demand was outpacing supply in his company's core markets the public markets were not properly valuing those properties and their business model.

(Ironically, six months later some of those assets are going public again via Ventas' acquisition.)

A $1.1B First Mortgage

Now this is what is new about the Blackstone-BioMed deal. Blackstone secured a first mortgage from Citi Group, MUFG Union Bank and Capital One for $1.1 billion, according to an announcement the Bethesda, MD-based Capital One made today.

Citi Group and MUFG Union led the financing. Capital One served as joint lead arranger and joint documentation agent and invested $125 million from its balance sheet.

Now Blackstone is monetizing that portfolio through the Ventas sale and, at least in theory, is in the position to pay off some of that debt if it chooses.

The current Wexford portfolio has 25 tenants in triple-net lease structures with a weighted average lease term of 10 years and 2% annual rent escalators. There are two development properties expected to open next year, leading to additional near-term growth.

J.P. Morgan Securities LLC acted as financial advisor to Ventas. We'll have to wait to hear more details about the new round of capital that will inevitably be secured by these assets -- and they surely will be recapitalized.

“Because laboratory and biotechnology buildings have such demanding specifications, they are highly capital intensive,” Erik Tellefson, managing director of Capital One's Healthcare Financial Solutions, said in a prepared statement.

Capital One was not able to return a phone call to GlobeSt.com in time for publication.

BETHESDA, MD-With Chicago-based Ventas Inc.'s move into the life sciences space via a $1.5 billion cash purchase of such a portfolio from private equity giant Blackstone Group in the spotlight today, it is worth looking back at how Blackstone acquired, and then financed, those assets. To be specific, the market is pretty clear on how the assets were acquired. Today, though, the details about the first mortgage Blackstone secured for its later acquisition of BioMed Realty Trust, have been announced by the lenders.

But the story starts before that later deal.

In 2013, San Diego-based BioMed Realty Trust acquired Wexford Science & Technology Trust, adding some 1.6 million square feet to BioMed Realty's footprint and 935,000 square feet of development projects. The deal closed with a value of $672 million.

A Great Catch

It was a great catch for BioMed as Wexford's operating portfolio was tenanted by research facilities at some of the US' top academic and medical universities, including the University of Pennsylvania Health System, Washington University in St. Louis, Wake Forest University, the University of Maryland, the University of Miami, Old Dominion University, the Illinois Institute of Technology and Penn State University.

Approximately $551 million of the initial consideration (the deal was first valued at $640 million) was for this portfolio, with the remaining $89 million for the 935,000 square feet of space under construction at three projects at that point in time. Those projects were anchored by the University of Pennsylvania Health System, Wake Forest University and Washington University in St. Louis.

Going Private

Two years later, towards the end of 2015, rumors began to circulate that Blackstone was acquiring BioMed Realty, including of course, the Wexford assets. Sure enough these rumors proved to be true--Blackstone Real Estate Partners VIII went on to make an all cash offer of $23.75 per share for the life sciences REIT, representing a 24% premium over its closing price on Sept. 22, when the rumors first emerged.

At the time BioMed CEO Alan Gold said that while demand was outpacing supply in his company's core markets the public markets were not properly valuing those properties and their business model.

(Ironically, six months later some of those assets are going public again via Ventas' acquisition.)

A $1.1B First Mortgage

Now this is what is new about the Blackstone-BioMed deal. Blackstone secured a first mortgage from Citi Group, MUFG Union Bank and Capital One for $1.1 billion, according to an announcement the Bethesda, MD-based Capital One made today.

Citi Group and MUFG Union led the financing. Capital One served as joint lead arranger and joint documentation agent and invested $125 million from its balance sheet.

Now Blackstone is monetizing that portfolio through the Ventas sale and, at least in theory, is in the position to pay off some of that debt if it chooses.

The current Wexford portfolio has 25 tenants in triple-net lease structures with a weighted average lease term of 10 years and 2% annual rent escalators. There are two development properties expected to open next year, leading to additional near-term growth.

J.P. Morgan Securities LLC acted as financial advisor to Ventas. We'll have to wait to hear more details about the new round of capital that will inevitably be secured by these assets -- and they surely will be recapitalized.

“Because laboratory and biotechnology buildings have such demanding specifications, they are highly capital intensive,” Erik Tellefson, managing director of Capital One's Healthcare Financial Solutions, said in a prepared statement.

Capital One was not able to return a phone call to GlobeSt.com in time for publication.