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New Bond Deal Set to Back Blackstone’s Refinance of BioMed Realty Trust Portfolio

Citigroup Leading $825 Million Notes Offering
August 3, 2017
Blackstone Group (NYSE: BX) is tapping the CMBS conduit market again to complete a second leg of its refinancing of its BioMed Realty Trust portfolio.

Citi Real Estate Funding, Deutsche Bank and Barclays Bank are prepping a new bond offering (CGDBB 2017-BIOC) that will be collateralized by an $825 million floating rate loan with an initial two-year term and three, one-year extension options.

The loan is secured by Blackstone’s interests in 15 BioMed office properties, which are primarily occupied by life sciences tenants. The assets are located in seven different submarkets in two states concentrated in Boston (52.2%) and San Diego (47.8%). Four tenants account for more than 4.9% of total base rent, according to loan documents.

Blackstone acquired the properties when it bought BioMed Realty Trust in January 2016 for $8 billion. The following March, Citigroup issued a CGGS Commercial Mortgage Trust 2016-RND, a loan-backed offering covering 58 life science and laboratory properties from the BioMed deal.

Proceeds from the mortgage loan in the new offering, along with $500 million of mezzanine financing, were used to refinance $1.1 billion of balance sheet debt, establish a $31.4 million reserve, and return approximately $208 million of equity to Blackstone, according to Kroll Bond Rating Agency, one of the firms rating the offering.

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