Boston – Boston Properties, Inc., Canada Pension Plan Investment Board (“CPP Investments”), and GIC announced that they have established a co-investment program for future acquisitions of office properties in the United States.
Through the program, the partners intend to selectively acquire and operate office properties in BXP’s core markets Boston, Los Angeles, New York, San Francisco and Washington, DC, as well as Seattle.
The companies have targeted an aggregate of $1.0 billion of equity to the program, with BXP and CPP Investments each allocating $250 million and GIC allocating $500 million. The partnership expects to employ leverage allowing for an initial investment capacity of approximately $2.0 billion. With these capital commitments, BXP expects to be able to accelerate the pace at which it can pursue acquisition opportunities and extend its investment capacity.
Under the agreement, over the next two years BXP will provide CPP Investments and GIC with exclusive first offers to form joint ventures with BXP to invest in acquisition opportunities that meet the target investment criteria of the program, subject to certain exclusions (including ground up development). BXP will act as general partner and provide customary property management, leasing and other services.
This co-investment program is consistent with BXP’s ongoing strategy to create value through opportunistic investments in high-quality office properties in markets with the strongest economic growth over time, while maintaining a strong balance sheet and modest leverage.
Hodes Weill & Associates acted as exclusive advisor to Boston Properties on this co-investment program.