Market Overview

Boston Properties and Canada Pension Plan Investment Board Complete the Acquisition of Santa Monica Business Park in Santa Monica, California


Properties, Inc.
(NYSE:BXP), one of the largest public
owners and developers of office buildings in the United States, and Canada
Pension Plan Investment Board
(CPPIB) announced today
that they have formed a joint venture and completed the acquisition of
Santa Monica Business Park in the Ocean Park neighborhood of Santa
Monica, California for a purchase price of approximately US$627.5
million, including US$11.5 million of seller funded leasing costs after
the effective date of the purchase and sale agreement.

Santa Monica Business Park is a 47-acre office park consisting of 21
buildings totaling approximately 1.2 million net rentable square feet.
Approximately 70% of the rentable square footage is subject to a ground
lease with 80 years remaining, including renewal periods. The ground
lease provides the joint venture with the right to purchase the land
underlying the properties in 2028 with subsequent purchase rights every
15 years. The property is 94% leased.

"We are excited to expand our presence in the Los Angeles region with
the acquisition of Santa Monica Business Park," commented Owen D.
Thomas, CEO of Boston Properties. "The Santa Monica market has
demonstrated strong growth in demand and rental rates from a variety of
world class tenants and industries. With the acquisitions of Santa
Monica Business Park and Colorado Center in 2016, Boston Properties
along with its joint venture partners now owns 2.3 million square feet
and controls 24% of the Santa Monica Class A office market, creating a
strong platform for us to continue to grow in the West LA markets. We
are also very pleased and honored to commence a relationship with Canada
Pension Plan Investment Board, a leading global investor in commercial
real estate."

As part of the joint venture, CPPIB will invest US$147.4 million for a
45% ownership in the Business Park. Boston Properties will provide
customary operating, property management and leasing services to, and
will invest US$180.1 million in the joint venture. In addition, the
acquisition was completed with US$300.0 million of financing. The
mortgage financing bears interest at a variable rate equal to LIBOR plus
1.28% per annum and matures on July 19, 2025. At closing, the borrower
under the loan entered into interest rate swap contracts with an
aggregate notional amount of $300.0 million through April 1, 2025,
resulting in an effective fixed rate of 4.063% per annum through the
expiration of the interest rate swap contracts.

"We are very pleased to establish a partnership with Boston Properties
to acquire Santa Monica Business Park. The investment provides us with
immediate scale in the West LA office market with a top tier owner and
operator, and we look forward to growing our relationship in the
future," said Hilary Spann, Managing Director, Head of Americas, Real
Estate Investments, CPPIB. "Santa Monica consistently sees strong
demand, driven by technology and media firms in the area, and the supply
constraints make this asset attractive for CPPIB to hold long term."

About Boston Properties

Boston Properties is a fully integrated real estate company, organized
as a real estate investment trust, that develops, redevelops, acquires,
manages, operates and owns a diverse portfolio of primarily Class A
office buildings totaling 50.3 million square feet and consisting of 167
office properties (including nine properties under construction), six
residential properties (including four properties under construction),
five retail properties and one hotel. The Company is one of the largest
owners and developers of Class A office properties in the United States,
concentrated in five markets - Boston, Los Angeles, New York, San
Francisco and Washington, DC.

For more information about Boston Properties, please visit the Company's
web site at

About Canada Pension Plan Investment Board

Canada Pension Plan Investment Board (CPPIB) is a professional
investment management organization that invests the funds not needed by
the Canada Pension Plan (CPP) to pay current benefits on behalf of 20
million contributors and beneficiaries. In order to build a diversified
portfolio of CPP assets, CPPIB invests in public equities, private
equities, real estate, infrastructure and fixed income instruments.
Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg,
Mumbai, New York City, São Paulo and Sydney, CPPIB is governed and
managed independently of the Canada Pension Plan and at arm's length
from governments. At March 31, 2018, the CPP Fund totalled C$356.1
billion. For more information about CPPIB, please visit
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