The $270.5 billion Canada Pension Plan Investment Board (CPPIB) and Boston Properties have formed a partnership, acquiring some California real estate in the process.
The two organizations picked up the Santa Monica Business Park on Monday, for $627.5 million, according to a news release. The 47-acre tract, located in the Ocean Park neighborhood, has 21 office buildings with about 1.2 million rentable square feet.
Roughly 70% of the rental space is subject to an 80-year ground lease, which allows the Canada-Boston partnership the right to buy the land underlying the park in 2028.
The property is 94% leased.
The Canada pension board will invest $147.4 million in the park for a 45% stake. Boston Properties will pump $180.1 million into the venture, and provide the customary operating, property management, and leasing services for the space. Another $300 million in financing helped complete the acquisition.
This marks the 11th office property the CPPIB has picked up in the US.
“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,” said Hilary Spann, the Canada board’s managing director, head of Americas, real estate investments. She mentioned that the investment gives the board an “immediate scale in the West LA office market.”
The park’s previous owner was Blackstone Group, according to Bloomberg.