Bank OZK Lends $140M on Boston Life Science Development
By Cathy Cunningham July 1, 2019 9:30 amreprints
Bank OZK has provided a $140 million senior construction loan for the development of a 275,000-square-foot speculative life science property in Somerville, Mass., Commercial Observer has learned.
HFF Boston negotiated the debt on behalf of sponsors, Leggat McCall Properties (LMP) and DLJ Real Estate Capital Partners.
The nine-story Class A lab building—at 101 South Street in the Boynton Yards area of Somerville—is being developed as part of a master-planned, mixed-use district which is set to transform the industrial neighborhood into a cutting-edge research and life science hub.
The property will provide tenants with state-of-the-art lab space and also include first-floor retail and community arts space, plus four levels of underground parking, per LMP’s website.
Located adjacent to Union Square and only one mile from Kendall Square—home to a large concentration of life science companies—101 South Street sits in prime position within Boston’s buzzing life science corridor, which comprises Somerville, Cambridge, Boston, Quincy and Braintree.
LMP and DLJ acquired a 3.4-acre parcel of land in Boynton Yards in 2018 and are combining the site with a neighboring 3.1-acre parcel they also control. The development of 101 South Street marks the project’s initial phase. Construction is expected to wrap in roughly 24 months, coinciding with the completion of the Massachusetts Bay Transportation Authority Green Line station in Union Square in 2021.
Based on recent leasing activity in the area, the spec property will not only be in good company, but in high demand.
The much-buzzed about Cambridge Crossing, a 43-acre, 4.5-million-square-foot development in East Cambridge, recently attracted Sanofi—the largest life science employer in Massachusetts—as a tenant. In December 2018, The Boston Globe reported that the French pharmaceutical company will place 2,700 employees in two soon-to-be-built properties at the mega-campus.
A month later, Netherlands-based health technology company Royal Philips announced it would move its North American Headquarters—plus 2,000 employees—from Andover to Cambridge Crossing, inking a deal for 243,000 square feet at the campus, as reported by Boston Business Journal.
No stranger to lab space development, LMP’s other properties include The Vale in Woburn, Mass., and Novartis Institutes for BioMedical Research in Cambridge, Mass.
The transaction represents one of Bank OZK’s largest loans in the Boston area. In May 2017, the lender provided $80 million in financing for HYM Investment Group’s acquisition of Suffolk Downs—a 161-acre property in East Boston—from Sterling Suffolk Racecourse, according to BLDUP.
Officials at Bank OZK declined to comment. Officials at DLJ could not immediately be reached. Officials at LMP and HFF did not immediately return requests for comment.