JLL Arranges $393M in Construction Financing for Life Sciences Redevelopment Project in Manhattan
NEW YORK — JLL Capital Markets has arranged $393 million in construction financing for a project that will convert a 399,029-square-foot office building at ABC/Disney’s former headquarters building in Manhattan into a life sciences facility with purpose-built research and lab space.
The borrower, a partnership controlled by New York City-based developer Taconic Partners and investment firm Nuveen Real Estate, purchased the building at 125 West End Ave. in 2019 for $230 million. With the vacating of the property by its primary tenant, which operated out of the building from 1985 until its lease expired in January of this year, the partnership is set to begin construction.
The senior lender on the four-year, floating-rate financing package was a fund backed by Apollo Global Management, while Oaktree Capital Finance also provided mezzanine debt for the project. Evan Pariser and Geoff Goldstein of JLL placed the financing.
The 125 West End Ave. building is located less than a quarter-mile from Lincoln Square and is close to the 1, 2 and 3 subway lines as well as West Side Highway. Additionally, the project is situated just 18 miles from the John F. Kennedy International Airport in New York City.
The existing building’s specs allow for a conversion to floor plates that will range in size from 37,000 to 53,000 square feet, as well as direct loading access on multiple floors and gated shipping and receiving points. These are all important building features for life sciences users.
New York City and New York State recently committed more than $1 billion to facilitate the growth of the life sciences industry. The market ranks second in National Institutes of Health funding over the past five years, only behind Boston/Cambridge. Despite all of this, life science companies comprise only 1.1 percent of the total New York City office investment market as compared to 12 percent in San Francisco, 25 percent in San Diego and 32 percent in Boston.
However, according to JLL’s recent 2020 Life Sciences Outlook report, New York City features industry-leading demand drivers that are on par with major U.S. life sciences markets such as Boston, San Francisco and San Diego. These include a highly skilled talent pool, proximity to Big Pharma and academic institutes.
“The transformation of 125 West End Ave. into a state-of-the-art life science hub and our financing of this project is a testament to the resilience of New York City and the promise of this emergent sector,” said Chris Balestra, president and chief investment officer at Taconic Capital. “This project is the largest of its kind to move forward since COVID-19 impacted our great city.”
— Julia Sanders