a. Summary
The Fund will seek attractive risk-adjusted returns from ground-up development, re-development and acquisition of high-quality life science properties located in established and emerging life science innovation clusters, with a focus on creating a world-class portfolio of Class A lab properties in what Breakthrough believes to be are leading life science markets in the U.S. and Europe. Targeted investment profiles include Build-to-Core and Reposition-to-Core, as described further in each case below.
The Fund will apply the below environmental characteristics to all real estate investments held by the Fund, except for debt investments. Up to 30% of the Fund’s capital commitments may be invested in core and core+ properties through the Income Portfolio. In addition, the General Partner may determine in its discretion to transfer any portfolio investment to the Income Portfolio within 12 months of the substantial completion of its initial business plan and stabilization. The investments held by the Income Portfolio will promote the environmental and social characteristics referred to in the separate pre-contractual disclosure of the Income Portfolio. Up to 10% of the Fund’s capital commitments may be invested in debt investments. The above environmental characteristics will not apply to these investments.
As set out in further detail below, the Fund intends that properties in its portfolio of underlying real estate will promote the following environmental characteristics:
- Green Building Certification: All fund ground-up development, redevelopment or refurbishment (“value-add”) projects will target obtaining a Green Building Certification within 24 months of completion of construction, redevelopment or refurbishment works.
- Net Zero: Breakthrough Properties will conduct a net zero carbon audit for each building in the portfolio (core asset) within 24 months of acquisition, to determine a pathway for achieving whole-building operational net zero carbon by 2050 or sooner.
- Resilience: Breakthrough Properties will assess each building in the portfolio for acute and chronic physical climate risks upon acquisition and will prepare a climate risk mitigation plan within 12 months of acquisition.
b. No sustainable investment objective
The Fund promotes environmental or social characteristics, but does not have as its objective sustainable investment.
c. Environmental or social characteristics of the financial product
The Fund intends that properties in its portfolio of underlying real estate will promote the following environmental characteristics:
- Green Building Certification: All fund ground-up development, redevelopment or refurbishment (“value-add”) projects will target obtaining a Green Building Certification within 24 months of completion of construction, redevelopment or refurbishment works.
- Net Zero: Breakthrough Properties will conduct a net zero carbon audit for each building in the portfolio (core asset) within 24 months of acquisition, to determine a pathway for achieving whole-building operational net zero carbon by 2050 or sooner.
- Resilience: Breakthrough Properties will assess each building in the portfolio for acute and chronic physical climate risks upon acquisition and will prepare a climate risk mitigation plan within 12 months of acquisition.
For the avoidance of doubt, for the environmental characteristics referred to in 1. to 3. above, where the Fund only owns a portion of a property, only that portion of the property shall be taken into consideration.
d. Investment strategy
The Fund will seek attractive risk-adjusted returns from ground-up development, re-development and acquisition of high-quality life science properties located in established and emerging life science innovation clusters, with a focus on creating a world-class portfolio of Class A lab properties in what Breakthrough believes to be are leading life science markets in the U.S. and Europe. Targeted investment profiles include:
Build-to-Core: Breakthrough plans to leverage the platform’s development expertise and deep understanding of client requirements and preferences to (a) identify development sites in core locations within the path of growth, (b) acquire land at a significant discount to market peak pricing and (c) develop state-of-the-art life science facilities.
Reposition-to-Core: Breakthrough will seek to utilize its growing slate of industry relationships, as well as its robust sourcing network, to identify both non-life science assets with appropriate physical specifications and outdated existing lab facilities to reposition into Class A life science properties with best in-class amenities and a full-service operational model to create additional value. The team will focus on investment costs, aiming to complete purchases below replacement costs, while achieving an all-in conversion basis approximately 20-30% below new construction and providing additional leasing flexibility in both time and economics.
e. Proportion of investments with environmental or social characteristics
The Fund will apply the above environmental characteristics to all real estate investments held by the Fund, except for debt investments.
Up to 30% of the Fund’s capital commitments may be invested in core and core+ properties through the Income Portfolio. In addition, the General Partner may determine in its discretion to transfer any portfolio investment to the Income Portfolio within 12 months of the substantial completion of its initial business plan and stabilization. The investments held by the Income Portfolio will promote the environmental and social characteristics referred to in the separate pre-contractual disclosure of the Income Portfolio.
Up to 10% of the Fund’s capital commitments may be invested in debt investments. The above environmental characteristics will not apply to these investments.
f. Monitoring of environmental or social characteristics
Breakthrough will consider the environmental characteristics in line with the methodologies set out below, and in line with the timings set out above in “c) Environmental or social characteristics of the financial product”.
g. Methodologies for environmental or social characteristics
To measure the attainment of the environmental characteristics described above, Breakthrough Properties will measure the proportion of properties in the Fund’s portfolio that have:
- A Green Building Certification, which is a rating system to assess a building or construction project’s performance from a sustainability and environmental perspective. Breakthrough Properties will use Leadership in Energy and Environmental Design (“LEED”), Building Research Establishment Environmental Assessment Method (“BREEAM”), Fitwel, WELL, or another sustainable building accreditation scheme recognized by Global Real Estate Sustainability Benchmark, as appropriate.
- A whole-building transition plan to achieve operational net-zero by 2050 or sooner, on the basis of the net zero carbon audit.
- A completed physical climate risk assessment identifying both acute and chronic climate-related hazards, based on the results of an industry-recognized climate risk screening tool.
h. Data sources and processing
[Certification by a third party such as LEED, BREEAM, Fitwel, WELL or another sustainable building accreditation scheme is achieved through a rigorous, internationally recognized standard third party accreditation process.
Breakthrough does not estimate data. All environmental data reported has been collected and third party verified.]
i. Limitations to methodologies and data
[Certain green building certifications only measure the building’s relevant environmental characteristics at the time construction is completed. These certifications will not consider how the building performs through its life and once it has been occupied. For such certifications, Breakthrough will consider the feasibility of, and where appropriate, may require such buildings to be re-certified].
j. Due diligence
As part of its regular due diligence, Breakthrough applies the following minimum safeguards to all its investments (including debt investments):
- Screening potential investments for physical climate risks affecting or resulting from the underlying property and requesting further information from the owner on this basis to conclude that there are not significant risks in this regard;
- For each potential investment, confirming with the owner of the underlying property: (i) whether any onsite fossil fuel combustion occurs, and if so the age of equipment involved; and (ii) whether the property has any current green building certification; and (iii) for European assets, the property’s current Energy Performance Certificate rating, or for U.S. assets, the property’s projected performance against any relevant Building Performance Standard together with any plan the owner has to meet that standard, in each case, to conclude that the real estate has a reasonable degree of energy efficiency.
k. Engagement policies
Breakthrough Properties will ensure that the Fund’s developments comply with relevant environmental, building standards, employment and health and safety requirements in the development and ownership phases. This includes conducting an assessment of a property’s physical condition, including environmental studies and existing mechanical systems. Breakthrough Properties’ internal sustainability engineering and management efforts are coordinated with Tishman Speyer’s Global Director of Sustainability & Utilities to identify and implement environmentally innovative operational technologies into the portfolio.
Through Breakthrough Property’s operating platform, Breakthrough Properties will ensure that building contractors commit to work in accordance with its internal policies and standards including (but not limited to) anticorruption, procurement, privacy, labor rights, modern slavery and people trafficking, and diversity and inclusion.
l. Designated reference benchmark
No index has been designated as a reference benchmark to attain the environmental or social characteristics promoted by the Fund.
[Insert Date] 2025
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