Sign in Subscribe
Banking industry

Record-Breaking Office Tower Sale in Cambridge, Massachusetts

Strategic Insights

— 1 min read

The largest office tower sale in the US this year, One Memorial Drive, has been purchased by a joint venture of MetLife Investment Management and Norges Bank Investment Management for $825 million. The 409,422-square-foot office building, located next to the Massachusetts Institute of Technology campus, is fully leased to Microsoft Corp. and InterSystems Corp. and values the 17-story building at over $2,000 per square foot.

Key Takeaways:

  • The transaction is one of the largest office tower deals in the US this year, with the building valued at over $2,000 per square foot.
  • The sale highlights the strong demand for high-quality office assets in key US markets, particularly in cities with limited supply, such as Cambridge.
  • The joint venture between MetLife Investment Management and Norges Bank Investment Management is a long-standing partnership established in 2013 to invest in Class A office properties.
  • The deal is part of a larger trend of commercial real estate transactions rebounding across the US, with $131 billion in deals in the second quarter, the third-highest volume on record.
  • One Memorial Drive is fully leased to reliable tenants in resilient industries, including technology and life sciences, making it a prime property for institutional investors.
  • The sale price of over $2,000 per square foot is significantly higher than the nationwide and Manhattan averages of $273 and $773 per square foot, respectively.
  • The transaction was facilitated by the irreplaceable location of the building, next to the Massachusetts Institute of Technology campus, and its profile of tenants, including Microsoft Corp. and InterSystems Corp.

Statistics:

  • $825 million: The sale price of One Memorial Drive
  • 409,422 square feet: The size of the office building
  • 17 stories: The number of floors in the office building
  • $2,000+/square foot: The valuation of the office building per square foot
  • $131 billion: The volume of commercial real estate transactions in the US in the second quarter
  • $273/square foot: The average office building price per square foot in the US
  • $773/square foot: The average office building price per square foot in Manhattan
  • 2013: The year the joint venture between MetLife Investment Management and Norges Bank Investment Management was established

Sources:

  • Bloomberg
  • MetLife Investment Management
  • Norges Bank Investment Management
  • Avison Young
  • CBRE Group Inc.
  • Blackstone Inc.
  • JPMorgan Chase & Co.

Read more