Harvard Medical School is in final negotiations to sell part of its property at 4 Blackfan Circle, and it will likely close the sale in May or June, Medical School Dean George Q. Daley said in an interview Tuesday.
The building, located between Vanderbilt Hall and the New Research Building on the school’s Longwood campus, has been on the market for at least five months.
In order to access pricing information and negotiate, potential buyers were required to sign a non-disclosure agreement. Daley said more than 90 firms requested information in this manner, about 40 of which sent representatives to the building to tour it.
At least 12 firms made bids on the building, according to Daley. At this point in the sale process, experts say sellers usually examine bids to determine whether they are viable and aligned with institutional priorities.
“Those types of criteria might be vetted,” said Aaron Jodka, research director at Colliers International, a real estate firm.
“We selected what we thought would be the best partners because these are folks that we're going to be working with in our community,” Daley said of the vetting process for bids on the property.
Daley said that, after reviewing second-round bids, the school began negotiations with potential buyers. Harvard plans to close the sale in “mid-to-late May or early June,” he added.
Pricing information is protected by the confidentiality agreement, and Jodka said few properties are put on the market in Longwood, making it difficult to find reference prices.
“The challenge with the Longwood Medical Area is that most of those properties are owned by institutions,” he said. “So you don’t actually see a lot of trading activity there.”
Still, he emphasized that the limited stock of property in Boston and Cambridge makes properties desirable.
“Boston is a highly targeted market by institutional investors,” he said. “When good-quality assets come to market, they are hotly contested.”
Daley agreed that the surrounding area made the sale attractive to buyers.
“It's extraordinary. It's evidence of the incredible value of being in this community. We're an incredibly dense community of scientific innovation and clinical care,” he said.
The entire property is not for sale — just eight of the building’s 11 floors. The deal will be organized as a 99-year unsubordinated leasehold interest, which means that Harvard will still own the building in name, but will give up all other rights to the purchaser.
Harvard Medical School brought in commercial real estate firm HFF and consulting firm Transwestern to manage the marketing and sale of 4 Blackfan Circle, according to listing documents. The school and the Dana-Farber Cancer Institute currently use the laboratory spaces that will be sold.
Daley said in December he hopes the sale will help the school pay off some of its debt in order to reduce the school’s interest payments. Last fiscal year, the Medical School ran a $44 million deficit, marking the ninth time in the last 10 years that the school closed in the red.
—Staff writer Luke W. Vrotsos can be reached at firstname.lastname@example.org. Follow him on Twitter at luke_vrotsos.