Gary Magnuson, Patrick Burns and Tim Leon
Head of Commercial Real Estate; Managing Director of Institutional Real Estate; and Executive Vice President of Commercial Real Estate at Citizens Bank
Last year's rank: 36
“Learning as we go,” is how Citizens Bank’s Gary Magnuson describes doing business during the pandemic. He and his team were quick studies — Citizens had roughly $5.5 billion in originations over the course of the year, remaining an active lender across a number of segments and geographies.
The company specifically emphasized the biotech and life sciences sectors, as evidenced by a $575 million construction loan it provided to a partnership between WS Development and PSP to build a 16-story, 625,000-square-foot, office and laboratory building in Boston’s Seaport District that is fully preleased to genomics firm Foundation Medicine, a subsidiary of drugmaker Roche.
“From the beginning, the deal was of great interest to us,” Patrick Burns said. “It’s in a market in the Seaport that we knew very well, WS Development is a long-term sponsor, and we liked the credit of Foundation Medicine.”
The deal transpired pre-COVID and was moving toward closing just as the pandemic was taking hold, Burns recalled. Citizens had underwritten the loan with the intention of syndicating it to a group of other lenders.
“So, the challenge on that one became keeping the other banks interested in joining us,” he said. “And, fortunately, I think our lenders recognized the same things we did. Life science is something that is here to stay. The market is extremely strong in Boston, given all the higher education that is centered there. So, we felt that, pandemic or no pandemic, that was a tenant that should thrive going forward.”
Citizens also closed on several large office deals, including $228 million in financing for the acquisition of Broadcom’s San Jose, Calif., headquarters; and a $254 million loan for the acquisition of Pioneer Natural Resources’ Irving, Texas, headquarters.
The fortunes of the office segment remain somewhat murky with questions around how enduring the pandemic-driven trend toward remote work will be. Tim Leon noted, though, that the office transactions Citizens worked on during the pandemic were “really structured as net-credit, investment-grade lease transactions.”
“We were not taking multi-tenant office risk, but rather, it was kind of the net-credit lease, corporate finance executions,” he said.
Looking ahead, Magnuson said the team saw opportunities in areas like life sciences, data centers and warehouse distribution, as well as office space that is substantially leased, and multifamilies in strong geographies and with strong sponsors.
“Obviously, the pandemic had an impact on some of our clients,” he said. “But, to a large degree, they have weathered the storm and things are looking much better.”—A.B.
