Ventas Inc. and GIC, the Singaporean sovereign wealth fund, have formed a joint venture that will initially own four in-progress university-based “Research & Innovation” development projects with a total cost of around $930 million. The parties noted that the joint venture might be expanded to include similar, already-identified future development projects.
Ventas’ contribution was its ownership interest in the initial four projects; the REIT will retain a more than 50 percent stake, while GIC will own a 45 percent interest. Ventas’ development partner, Wexford Science & Technology, remains the developer of, and a minority partner in, all of the projects.
Ventas will manage the joint venture and will receive customary fees and incentives.
The initial four projects will total 1.4 million square feet when completed and are about 65 percent preleased in aggregate. They are expected to open between 2021 and 2023 and comprise:
- One uCity Square: A University of Pennsylvania–affiliated expansion of the uCity Square project in Philadelphia
- Also, in uCity Square, an academic medicine facility for the Drexel University College of Nursing and Health Professions
- Pitt Immune Transplant and Therapy Center (Phases I & II): A research, academic medicine and innovation hub for the University of Pittsburgh Medical Center, co-located with its Shadyside Hospital
- A Class A, R&D center anchored by Arizona State University.
Total project costs of about $180 million have been incurred so far on these developments, for which at closing GIC reimbursed Ventas for its share.
Ventas and GIC will contribute their pro rata shares of the future costs to complete the initial four projects, which are expected to be funded with about $500 million in construction financing.
Eastdil Secured acted as sole financial advisor to Ventas and is acting as debt placement agent for the joint venture on its construction financing. King & Spalding LLP acted as Ventas’s legal counsel; Skadden, Arps, Slate, Meagher, & Flom LLP acted as GIC’s legal counsel.
Over time, the joint venture partners also have the opportunity to add certain pre-identified R&I development projects currently in Ventas’s pipeline. These projects, if all completed, would expand the joint venture to encompass more than $2 billion in total expected project costs. Wexford is also the developer of, and would be a minority partner in, these additional projects.
Philadelphia is ranked #7 among top U.S. life science metros, in an October U.S. life science report from CBRE. Driven by biotech R&D, Pittsburgh is called out as the top emerging life sciences center, first in a list of 10 that ranks just below the nation’s top 13, in the same report.
CBRE also notes that between them, in 2019 the University of Pennsylvania and University of Pittsburgh received more than $1.1 billion in funding from the National Institutes of Health.
In February, Ventas announced the impending launch of its new perpetual-life fund, Ventas Life Science and Healthcare Real Estate Fund LP. And in a $1 billion deal just last month, Ventas acquired Genesis South San Francisco, a life science campus featuring a 21-story tower that reportedly is the nation’s tallest life science building. The seller was a joint venture of Bain Capital Real Estate and Phase 3 Real Estate Partners.