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Harvard Medical School will sell portions of its property on 4 Blackfan Circle in order to alleviate debt pressures.
The 11-story building at 4 Blackfan Circle houses laboratory and office space and lies adjacent to the Medical School’s new research building in the Longwood Medical Area. HFF, the agency in charge of the sale, will list eight of the building’s 11 floors—a total of 192,140 square feet—according to documents posted by the company.
Medical School Dean George Q. Daley ’82 said the sale, which he called a “difficult strategic decision,” is meant to reduce the school’s annual debt.
“The hope is that the proceeds from the sale of that building will allow us to pay off a significant part of our debt and be able to stop having to draw down our endowment to pay for our operations,” Daley said in an interview in December.
The sale comes as the Medical School closed the 2017 fiscal year with a $44 million operations deficit, marking the ninth time the Medical School has closed in the red across the past 10 years.
In the interview last month, Daley attributed the continued deficit to heavy losses the school suffered during the 2007-2008 financial crisis. High research costs and continued growth in faculty and student size since then have resulted in a “financially challenging budget,” Daley said.
“We have very, very strong plans to bring the budget into balance,” said Daley, who said he has delayed new recruitments to “rightsize” the faculty. “It does require some significant belt-tightening, which we’ve asked for across our staff administration and faculty.”
The potential sale of 4 Blackfan Circle would be a 99-year unsubordinated leasehold interest, meaning Harvard will retain ownership of the building in name, but will cede all other rights to the buyer.
The Medical School and the Harvard-affiliated Dana-Farber Cancer Institute currently occupy the space, while Harvard-affiliated Brigham and Women’s Hospital uses the remaining three floors. Harvard Medical School departments will likely remain in the building under the new owner, according to HFF documents posted online.
Along with the sale of the building, Daley said in December that the Medical School has recently observed a positive four percent variance in the budget, which he said will result in millions more in cost savings for the next budget cycle.
“The University has partnered with us very, very closely in helping us to reorganize our finances so that we are confident over the next two to three years we will bring our budget back into balance,” Daley said.
—Staff writer Luke W. Vrotsos can be reached at firstname.lastname@example.org.
—Staff writer William L. Wang can be reached at email@example.com. Follow him on Twitter @wlwang20.
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