Bank OZK Provides $60M Construction Loan on Boston-Area Life Science Property
Bank OZK provided a roughly $60 million construction loan for the development of Lincoln Property Company and Metlife Investment Management’s 300 Third Avenue — a 140,000-square-foot life science development in Waltham, Mass., Commercial Observer has learned.
The lender financed the project at roughly 55 percent loan-to-cost, and the development itself will run a little over $105 million, Lincoln senior vice president Scott Faber confirmed.
News that the development was underway was first reported by the Boston Business Journal on Friday. It’s Lincoln’s first ground-up life sciences development and MetLife’s first ever life sciences project, according to Faber and a representative for MetLife. Nonetheless, Lincoln either owns, manages and leases more than 2 million square feet of life science-oriented property in and around Boston, Faber said.
“The fundamentals of the life science sector remain strong with Massachusetts at the forefront of the global fight against coronavirus,” Faber said in prepared remarks. “We believe the innovative, purpose-built design, top tier location and timing of 300 Third Avenue will be attractive to existing life science companies in the area as well as the broader life science industry.”
Lincoln was granted approvals for the project at 300 Third Avenue in Waltham in July last year. When completed in 2021, the project will feature four stories of laboratory space and 441 on-site parking spaces.
Eastdil Secured’s James Cristofori and Sarah Lagosh arranged the construction debt and also secured MetLife as a joint venture partner in the deal.
“Bank OZK is pleased to be the senior secured lender on this world-class life science facility,” Chris Lawton, an executive vice president of originations at Bank OZK, said in a statement. “The strong financial capacity of Lincoln Property Co. and MetLife Investment Management, coupled with such a unique and timely real estate asset, makes this partnership ideal.”
Currently home to a 1960s office building, the site is now being redeveloped to meet increased demand from Massachusetts’ biotech community, according to information on Lincoln’s website. As the No. 1 biotech hub in the U.S, Greater Boston is experiencing high demand, with a scarcity of space. Cambridge and Boston have only 1 percent and 3 percent of vacancy, respectively.
Lincoln’s Jeffrey Moore, Tim Latham, Chris Devaux and Christopher Scott will be in charge of leasing the property, which will include a mix of flex office and lab space geared to biotech companies
“The list of Massachusetts based companies that have pivoted to focus on COVID-19 is long and filled with some of the area’s most prominent occupiers of lab and office space. The strong demand from life sciences tenants simply can’t be met with the existing inventory across Cambridge, Boston and inner suburbs,” Moore said. “There are several life sciences companies with large requirements in the market right now. These tenants are looking for the proximity to the best talent and collaborative environment that 300 Third Avenue will offer, as such we anticipate leasing at the project to be quite competitive.”
It’s not Bank OZK’s first foray into life science development lending, a sector that’s hotter than ever given the COVID-19 pandemic. Roughly a year ago, it provided a $140 million senior construction loan for the development of a 275,000-square-foot speculative life science property in Somerville, Mass. on behalf of Leggat McCall Properties and DLJ Real Estate Capital Partners.