Manhattan Life Science Conversion Project Lands $393M in Construction Finance
New York’s demand drivers for this asset class are on par with major US life sciences markets such as Boston, San Francisco and San Diego.
A partnership controlled by Taconic Partners and Nuveen Real Estate has secured $393 million in construction financing for the redevelopment of 125 West End Ave., in the West Side life science cluster of Manhattan. JLL Capital Markets’ Evan Pariser and Geoff Goldstein arranged the four-year, floating-rate senior loan through funds managed by Apollo Global Management and a mezzanine loan through Oaktree Capital Finance. The same JLL team also arranged $181 million in acquisition and bridge financing for 125 West End and the surrounding campus in Fall 2019.
The 125 West End Ave. project is a conversion of an existing 399,309-square-foot office building into a research and laboratory complex. While there are often difficulties associated with such projects, JLL maintains that this particular building’s floor plates are ideal for a life science conversion as they range from 37,000 to 53,000 square feet and feature 15’9″ heights, industrial grade floor loads, direct loading access on multiple floors and gated shipping and receiving points.
According to JLL’s recent 2020 Life Sciences Outlook, New York’s demand drivers for this asset class are on par with major US life sciences markets such as Boston, San Francisco and San Diego. They include a highly skilled talent pool, proximity to Big Pharma, and world class academic institutes. New York City and New York State have also committed more than $1 billion to facilitate the growth of the life science industry and the city ranks second in NIH funding over the past five years, only behind Boston / Cambridge. Despite all of this, life science companies comprise only 1.1% of the total New York City office investment market as compared to 12% in San Francisco, 25% in San Diego and 32% in Boston.