DivcoWest Properties is selling a US office asset for $725m (€653.3m).
The One Kendall Square asset in East Cambridge, Massachusetts is being sold, according to a public document from the buyer, Alexandria Real Estate Equities.
The deal is expected to close in the coming months.
DivcoWest has owned the property since 2014, when it paid $394m, according to sources.
The real estate manager invested another $24m to cover planned upgrades on the property.
Alexandria stated in a public document that the deal would allow the company to grow the initial stabilised yield of 5.8% to 6.4%, and the initial stabilised cash yield from 4.7% to 6.2%, on completion of the ground-up development and near-term lease renewals.
The seven-building campus is 98.5% occupied.
The transaction also includes land for an additional 172,500 sqft of development.
The planned acquisition by Alexandria will involve a combination of equity and debt.
The debt part is the assumption of a secured note payable with an outstanding balance of around $203m.
The secured note had a maturity date of February 2014 and an interest rate of 4.82%.
DivcoWest has held ownership in the asset for its fund, DivcoWest Fund IV, for which it raised $976m in 2014.
The total capitalisation of the fund was $2.8bn, with leverage of 65%.
The fund targeted a 14-18% gross IRR.
Major limited partners in the fund include CalSTRS, the Oregon Public Employees Retirement Fund and Mass PRIM.
