(Bloomberg)—Oxford Properties Group and J.P. Morgan Global Alternatives sold an office tower in Cambridge, Massachusetts, for $825 million, one of the largest such deals in the U.S. this year.
The property, One Memorial Drive, was purchased by a joint venture of MetLife Investment Management and Norges Bank Investment Management, according to a statement Thursday. The 409,422-square-foot (38,037-square-meter) building is next to the Massachusetts Institute of Technology campus and fully leased to Microsoft Corp. and InterSystems Corp.
The deal values the 17-story building at more than $2,000 a square foot. That compares with the nationwide and Manhattan averages of $273 and $773 a square foot, respectively, data from Avison Young show.
“The profile of the customer base, asset, the irreplaceable location” likely contributed to the high price achieved, Chad Remis, Oxford’s executive vice president of North America, said in an interview. “There’s still a significant amount of appetite and conviction from institutional investors in high-quality assets and submarkets.”
Commercial real estate transactions across the U.S. are on the rebound after tumbling earlier in the pandemic. Deals totaled $131 billion in the second quarter, the third-highest volume on record for the period, behind 2019 and 2007, according to brokerage CBRE Group Inc.
The Cambridge transaction is the latest joint venture for MetLife and Norges, a partnership established in 2013 to invest in Class A office properties in key U.S. markets.
“Located in a city where demand for office space significantly outstrips supply, and with reliable tenants in resilient industries such as technology and life sciences, we believe One Memorial Drive will be a trophy property within our portfolio,” Ashleigh R. Simpson, regional head of acquisitions and joint ventures at MetLife Investment Management, said in a separate statement.
Oxford and institutional investors advised by J.P. Morgan Global Alternatives, part of JPMorgan Chase & Co., bought the property from Blackstone Inc. in 2014.
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