Breakthrough Properties' Life Science Fund Raises $1B

Breakthrough Properties, a joint venture formed in 2019 by Tishman Speyer and Bellco Capital, has completed the initial close of the Breakthrough Life Science Property Fund. The fund has raised $1 billion in capital and co-investments and is continuing to seek additional capital for a perpetual investment vehicle attached to the fund.

Breakthrough Properties will utilize the fund to develop and acquire lab facilities in top life science markets globally.

Today, the needs of life science companies are rapidly evolving, due in large part to new market dynamics created by the pandemic. “The life science industry has experienced unprecedented productivity, innovation and scientific discovery in recent years as biotechnology and technology have been converging. The events of 2020 have further fueled the need for scientific innovations,” said Arie Belldegrun, co-chairman of Breakthrough and chairman of Bellco, said in a statement about the firm’s investment strategy.

Venture capital investment is playing a major role in life science growth. Data from JLL shows that healthcare sector funding grew 25% year-over-year in the first quarter of 2020, and throughout the year, institutional investment has increased with a total of 24 active players in the market compared to 20 players in 2019.

As a result, life science companies are seeking high-quality lab space that can support research efforts at every stage. Though its investment, Breakthrough plans to target properties with best-in-class physical infrastructure, a curated tenancy, collaborative amenities and services and dynamic tenant spaces. The fund’s current projects include The 105, a development in Boston that will deliver in early 2022. The seven-story property is seeking LEED Gold and Fitwel certifications. Breakthrough has already signed a full-building 263,500-square-foot lease at the property with CRISPR Therapeutics.

Breakthrough isn’t alone. Several institutional capital sources have identified the life science sector for investment opportunities based on this tremendous growth. In October alone, 29 life science funds had closed almost $16 billion, according to Nicole Riley, attorney from Goodwin’s Business Law Department. Many of these investors are supporting opportunities outside of the traditional life science markets—generally regarded as San Francisco, San Diego and Cambridge—and others are looking at alternative strategies to increase life science supply, including converting office towers into lab space.