CAMBRIDGE, MASS. — MetLife Investment Management, the institutional asset management business of MetLife Inc., and Norges Bank Investment Management, the asset management division of Norges Bank, have acquired One Memorial Drive, a Class A office building in Cambridge, for $825.1 million. Oxford Properties Group and a fund advised by J.P. Morgan Global Alternatives sold the property for over $2,000 per square foot.
Located on the Charles River about 0.7 mile from the Massachusetts Institute of Technology, One Memorial Drive is a 17-story building with 409,422 square feet of leasable space. Built in 1986 and renovated in 2018, the fully occupied property has two long-term tenants, InterSystems Corp., a Cambridge-based data technology provider, and Microsoft Corp., a Redmond, Wash.-based computer software and electronics retailer.
In 2017, the previous owner increased the leasable area of the building by more than 10 percent by converting an entire floor of underutilized parking into office space. The new transformed office space was then leased to InterSystems.
“We continue to see significant areas of opportunity within the commercial real estate sector despite the challenges posed by the pandemic over the last 18 months,” says Robert Merck, global head of real estate and agriculture at MetLife Investment Management. “We are delighted to have once again partnered with Norges Bank Investment Management on a landmark transaction for the U.S. commercial real estate market, one which we believe will create strong value in the years to come.”
The buyers plan to focus on sustainability for any future changes at the property. In 2017, One Memorial Drive received Leadership in Energy and Environmental Design (LEED) silver certification from the U.S. Green Building Council. The LEED certification ensures that the building was constructed in an environmental conscious way.
The new owners plan to build on past efforts to create an even more sustainable and healthy workplace, including enacting MetLife’s MetZero program, which uses a carbon cascade approach to reduce net greenhouse gas emissions year over year. This program is meant to reduce emissions in the building through a combination of energy efficiency and on- and off-site renewables.
“The One Memorial Drive transaction reinforces our approach of targeting properties in strategic geographies and markets, as well as our commitment to environmental sustainability across our real estate portfolio,” says Sara Queen, head of real estate equity at MetLife Investment Management.
Eastdil Secured represented Oxford Properties and J.P. Morgan on the sale.
The transaction represents the largest single-asset U.S. office transaction to date in 2021, according to data provider CoStar.
— Julia Sanders