Taconic, Nuveen close $600M funding deal for Manhattan life science venture

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Taconic Partners together
with Nuveen Real Estate, announced the completion of a $600 million capitalization of 125 West End Avenue, New York
City’s newest state-of-the-art life sciences building on Manhattan’s West Side.

LaSalle Investment Management, on
behalf of its underlying limited partner, has joined as an equity partner in a
new joint venture to execute the project, which will also be supported by
construction financing from funds managed by Apollo Global Management, Inc. and
funds managed by Oaktree Management, L.P.

“The transformation of 125 West End Avenue into a state-of-the-art life science hub and our recapitalization 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.”

As part of Taconic’s planned investments
of over $2 billion into life sciences in the NYC market, 125 West End Avenue
further solidifies the West Side of Manhattan as a cluster. Construction on the
property commenced in February and will involve a comprehensive renovation of
the building including a new robust mechanical plant with purpose-built lab infrastructure,
a new high-performance façade, a roof terrace, conference center, and dramatic
new lobby. The project design team is led by architect Perkins+Will New York and
engineering firm JB&B. JRM Construction has been engaged as construction
manager. Construction is expected to be complete in 2023.

The project is supported by a $393
million construction loan from funds managed by Apollo Global Management and
Oaktree Capital Management, arranged by Evan Pariser and Geoff Goldstein of JLL
Capital Markets. The equity investment by LaSalle Investment Management’s
limited partner was arranged by William
Shanahan, Darcy Stacom and Steven Purpura of CBRE. 

Originally constructed by the Chrysler Corporation as an automotive showroom, 125 West End Avenue is an eight-story, 400,000-square-foot building featuring large floorplates, ceiling heights of up to 16 feet, Hudson River views, heavy floor loads and multiple access points. In late 2019, Taconic Partners and Nuveen Real Estate purchased the property, which until recently was occupied by ABC/Disney as part of their NYC headquarters.

“Life sciences is a sector that continues
to evolve and show promise. As Taconic and Nuveen set out
to address the lack of supply of lab space in the
market, we do so with confidence in our team and in the strength and resiliency
of New York City,” said Nadir Settles, managing director of Nuveen
Real Estate. 

“125 West End Avenue fits well with our winning properties
strategy, which includes buying and developing well-conceived life science
projects for our clients. Manhattan’s numerous research institutions and
growing life sciences sector will be looking for robust infrastructure,
attractive design and highly amenitized facilities to compete for top talent,”
said Stu Sziklas, LaSalle’s US Head of Custom Accounts. “Taconic and Nuveen
Real Estate have a long track record of success in New York, and are excellent
partners on this state-of-the-art, transformational project.”

“Oaktree is thrilled to be working with a
best-in-class consortium of sponsors and capital partners on this landmark
project at 125 West End Avenue,” said Justin Guichard, co-Portfolio Manager for
Oaktree’s Real Estate Debt and Structured Credit strategies. “We believe the
upcoming growth of the life science sector will continue to diversify and
strengthen the already robust NYC economy.”

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