Boylston Properties' Watertown, Massachusetts, life science building, 500 Forge, has landed $119.2 million refinancing deal.
The exact terms were unclear, but Tishman Speyer Properties provided a $25.2 million mezzanine loan, with Landesbank Baden-Württemberg issuing a $94 million senior loan. JLL arranged the deal.
The 158,683 square feet Class A property went under redevelopment in 2023 and is now LEED Gold-certified. The space now breaks down to 40 percent office and 60 percent for lab research and development. The building is 100 percent leased to three tenants: Mariana Oncology, AvenCell Therapeutics and Novartis' Orna Therapeutics. Some other features at 500 Forge include outdoor balconies, covered parking, 15-to-18 foot ceiling heights, multiple shower rooms and bike storage.
In the short term, life sciences might be facing challenges, as NIH funding, layoffs at the FDA and a notable drop in new drug and biologics license approvals remain at the forefront of concerns, as noted recently in a Newmark report.
That said, JLL called East Watertown, where 500 Forge is located, a "premier life sciences cluster." Also, the asset represents a portion of the mixed-use development Arsenal Yards, which includes more than a million square feet of restaurants and shops to date. The location is just seven miles to the West of Downtown Boston.
“Despite the broader headwinds facing the life science sector, 500 Forge underscores the reality that lenders remain committed to backing best-in-class assets and Sponsors,” said Brett Paulsrud, one of JLL's brokers who represented the borrower on the deal.
“High-quality opportunities continue to attract capital, even in a more discerning market environment.”
According to Newmark, most life science markets are reporting negative absorption year-to-date— but that category is trending more favorably in Boston. A potential tailwind for the whole sector could come from the pharmaceutical industry, which is investing more in domestic manufacturing, as Washington continues its policies, Newmark noted. But overall, the full impact going forward for life sciences remains unknown.
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