Life sciences demand propels NYC redevelopment project forward

Rhea-AI Summary

JLL Capital Markets has secured $393 million in construction financing for the redevelopment of 125 West End Ave. in Manhattan into a leading life sciences facility. The financing includes a four-year, floating-rate senior loan and a mezzanine loan, facilitated through partnerships with Apollo Global Management and Oaktree Capital Finance. The project involves converting a 399,309-square-foot office building into a state-of-the-art research complex. New York City ranks second in NIH funding, indicating strong demand for life sciences, yet it only holds 1.1% of office investment in this sector compared to other major cities.

Positive

• Secured $393 million in construction financing for the redevelopment project.
• The project is strategically located near the West Side life sciences cluster.
• New York City has committed over $1 billion to support the life sciences sector.

Negative

• Life science companies represent only 1.1% of NYC's total office investment market, significantly lower than other major markets.

NEW YORK, March 17, 2021 /PRNewswire/ -- JLL Capital Markets announced today that it has arranged a $393 million construction financing for the redevelopment of 125 West End Ave. into a world-class life sciences facility in the West Side cluster of Manhattan.

JLL worked on behalf of the borrower, a partnership controlled by Taconic Partners and Nuveen Real Estate, to secure a four-year, floating-rate senior loan through funds managed by Apollo Global Management, Inc. 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 involves the conversion of an existing 399,309-square-foot office building into a state-of-the-art, purpose-built research and laboratory complex. The existing building's floor plates are ideal for a life science conversion ranging from 37,000 to 53,000 square feet and featuring 15'9" heights, industrial grade floor loads, direct loading access on multiple floors and gated shipping and receiving points.

The project benefits from immediate proximity to the West Side life sciences cluster and access to both public transportation and commercial thruways. The location on West 66^th St. provides direct access to the Central Park 65^th St. traverse. 125 West End Ave. is also a short walk from Lincoln Square and the 1, 2 and 3 subway lines as well as close proximity to the West Side Highway, providing access to the entire Tri-State area.

According to JLL's recent 2020 Life Sciences Outlook, New York boasts industry-leading demand drivers on par with major U.S. life sciences markets such as Boston, San Francisco and San Diego, including 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.

The JLL Capital Markets team representing the borrower was led by Senior Managing Director Evan Pariser and Managing Director Geoff Goldstein.

"Taconic and Nuveen had a vision for an Upper West Side life science cluster years ago," noted Pariser. "It's been really exciting to witness this vision turn into reality as they successfully build out 125 West End Ave. and create a truly dynamic life science cluster in New York City that one day may rival the likes of Boston or San Diego."

"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 Taconic President and Chief Investment Officer Chris Balestra. "We are pleased to be working with our partners to realize this project—the largest of its kind to move forward since COVID-19 impacted our great city."

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.

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About Taconic Partners
Headquartered in New York, Taconic Partners has successfully developed and repositioned over 12 million square feet of office, mixed-use and retail space, and close to 6,500 units for-sale and rental multi-family housing, with a total transaction value of over $5 billion. To learn more, please visit: taconicpartners.com.

About Nuveen Real Estate
Nuveen Real Estate is one of the largest investment managers in the world with $133 billion of assets under management. Managing a suite of funds and mandates, across both public and private investments, and spanning both debt and equity across diverse geographies and investment styles, Nuveen provides access to every aspect of real estate investing.

With over 80 years of real estate investing experience and more than 600 employees* located across over 25 cities throughout the United States, Europe and Asia Pacific, the platform offers unparalleled geographic reach, which is married with deep sector expertise. For further information, please visit nuveen.com/realestate.  

*Includes 300+ real estate investment professionals, supported by a further 300+ Nuveen employees. Source: Nuveen, 31 Dec 2020.

About JLL
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion, operations in over 80 countries and a global workforce of more than 91,000 as of December 31, 2020. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.

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Contact: Kristen Murphy, JLL Senior Manager, Public Relations
Phone: +1 617 848 1572
Email:  Kristen.Murphy@am.jll.com 

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SOURCE JLL

FAQ

What is the amount of construction financing arranged by JLL for 125 West End Ave?

JLL arranged $393 million in construction financing for 125 West End Ave.

Who are the partners involved in the financing of the 125 West End Ave project?

The financing involved a partnership between Taconic Partners and Nuveen Real Estate, with loans from Apollo Global Management and Oaktree Capital Finance.

What is the size of the existing building at 125 West End Ave?

The existing building at 125 West End Ave has a total size of 399,309 square feet.

How does New York City's life sciences office investment market compare to other cities?

New York City life sciences companies account for only 1.1% of its total office investment, far below cities like Boston and San Francisco.

What type of facility is being developed at 125 West End Ave?

The redevelopment project aims to create a state-of-the-art life sciences research and laboratory complex.