As part of its ongoing efforts to advance the Kendall Square innovation ecosystem and contribute to the vibrancy of the neighborhood, MIT has entered into an arrangement involving the three buildings known as the Osborn Triangle. MIT News spoke with Israel Ruiz, MIT’s executive vice president and treasurer, about the announcement and its implications for the Institute and the Kendall area.
Q: What is being announced today?
A: MIT has completed a transaction that enabled Harrison Street Real Estate to acquire the three-building complex known as Osborn Triangle. This complex includes 610 Main Street, 1 Portland Street, and 700 Main Street, and is currently leased to Pfizer, Novartis, and Lab Central. Under this arrangement, MIT will retain ownership of the land and will “ground lease” the complex to a new joint venture that will be led by Harrison Street Real Estate and will include Bulfinch Companies and MIT, which will retain a minority interest in the transaction.
The Osborn Triangle complex was developed by MIT over the past two decades and has helped transform what used to be a parking lot and vacant building into an anchor of the innovation ecosystem in Kendall Square. This is a great example of the positive impact that MIT’s investment in the area can have. The formation of the joint venture with new investment partners will allow MIT to continue to reinvest in the area surrounding its campus and contribute to a vibrant and inclusive Kendall Square. Through the Kendall Square Initiative, construction is currently underway that will bring a mix of uses to the area, including academic, commercial research, dormitory, market-rate and affordable housing, and retail, as well as a much-needed grocery store that will open later this year.
Q: What is a ground lease?
A: A ground lease is a mechanism that allows MIT to reduce its investment in a property by giving another entity rights to operate the property for a period of time, after which the property will revert back to MIT control. This structure enables MIT to redeploy capital to new investments in the area, as it is doing through the Kendall Square Initiative and its acquisition of 10 acres of land from the federal government as part of the Volpe transaction. Investment partners help MIT to continue to further improve the area surrounding its campus.
Q: Is this the first time MIT has done this?
A: No, MIT has entered into many ground lease transactions over the years. Today’s transaction is highly consistent with MIT’s long-held philosophy of collaborating with others to invest in the area while ensuring that MIT retains ownership of the land over the long term. Technology Square and University Park are two recent examples of this approach. We’re excited to add Osborn Triangle to this list.