Diversified Healthcare Trust Lowers Interest in JV Owning 11 Fan Pier and 50 Northern Avenue in Boston
Posted on 12/30/2021
Diversified Healthcare Trust (DHC) entered into an agreement with a global institutional investor to acquire an equity interest in DHC’s existing joint venture that owns the two building life science complex located at 11 Fan Pier and 50 Northern Avenue in Boston, MA. The new investor will acquire from DHC a 35% equity interest in the joint venture for a purchase price of approximately US$ 378 million, with the existing partner continuing to own a 45% equity interest and DHC owning the remaining 20% equity interest. The purchase price for the 35% equity interest is based on a property valuation of $1.7 billion, less the US$ 620 million of existing secured debt on the property.
The property included in the joint venture was acquired by DHC in May 2014 for US$ 1.1 billion and consists of two 15-story, class A life science buildings located in Boston’s Seaport District. The two buildings are approximately 95% leased to Vertex Pharmaceuticals, Inc. through 2028 and include 1.1 million rentable square feet of lab, corporate office, and street level retail space. DHC expects to use the cash proceeds from this transaction to fund capital expenditures, to reduce outstanding indebtedness and for other general business purposes.
In March 2017, DHC entered into an agreement related to a joint venture for a property located in Boston, Massachusetts, or the joint venture, with an institutional investor. DHC received US$ 261 million from that investor for a 45% equity interest in our joint venture, and we retained the remaining 55% equity interest.
DHC is managed by The RMR Group LLC, or RMR LLC, the majority owned operating subsidiary of The RMR Group Inc.
