IQHQ’s largest local project culminated two decades of attempts to spur development over the Massachusetts Turnpike in Boston and heal the scar left by the highway’s construction. Photo by James Sanna | Banker & Tradesman Staff
IQHQ Inc. burst onto the Boston real estate scene in 2021 with a series of big-ticket acquisitions after raising $2.5 billion and announcing plans for 4.4 million square feet of lab development in leading East and West Coast life science hubs.
Preliminary work on its signature project, the $1 billion Fenway Center air rights project, has been under way since 2022, but IQHQ now is remaining silent on the timetable for starting vertical construction of two lab towers totaling 720,000 square feet. Two other IQHQ life science developments in the Fenway and Brighton also have uncertain timelines after turbulent permitting processes.
The Boston track record mirrors IQHQ’s strategy in its hometown of San Diego, where it placed its biggest bet on a development site in an unproven life science location. In both cities, IQHQ’s sites have failed to attract tenants as lab leasing has retreated to established biopharma clusters.
A Waiting Game in Downtown San Diego
San Diego’s life science industry historically has gravitated to the manicured outlying neighborhoods of Torrey Pines and Sorrento Mesa. According to CBRE data, the two submarkets have a combined 13 million square feet of life science space.
In 2021, IQHQ became the first major lab developer to seek to establish a new cluster in the downtown core, acquiring the lease for an 8-acre portion of a U.S. Navy property on San Diego Bay. The project received $915 million in construction financing from Bank OZK.
IQHQ has yet to announce a single lab or office tenant for a 1.7 million-square-foot speculative development known as Research and Development District (RaDD) completed this spring. Developer rivals including BioMed, Alexandria Real Estate Equities and Breakthrough Properties dominated the San Diego area’s top 10 lab leases of the past 12 months at their suburban campuses, according to CBRE.
IQHQ, a privately-held REIT, remains current on its loan payments, Bank OZK stated in its most recent quarterly report, but the bank negotiated a two-year extension option after IQHQ contributed an additional $87 million to interest, carry and leasing reserves.
Untapped Territory in Fenway and Brighton
Similarly in Greater Boston, few development sites were available in established lab markets such as East Cambridge. With the industry expanding, IQHQ sought to plant a flag in neighborhoods such as the Fenway and Brighton that are better known for off-campus housing and sports bars than cutting-edge genetics research.
Growth shoots started to emerge in recent years at developments such as Brighton’s Boston Landing and 201 Brookline Ave., a 14-story Fenway lab tower co-developed by Alexandria Real Estate Equities and Samuels & Associates.
In 2022, IQHQ received approval to demolish a vacant commercial building at 109 Brookline Ave. in the Fenway and construct a 250,000-square-foot lab building, which broke ground in mid-2023 but has not announced any leases. Building permit data lists the project cost at $300 million.
As the market lost momentum, two future IQHQ developments have been delayed by an uproar over cultural displacement and historic preservation.
IQHQ’s attempts to convert the former Hotel Buckminster to lab space prompted advocates to get the property landmarked. The company hasn’t yet filed full plans for the property with city officials. Photo by James Sanna | Banker & Tradesman Staff
In Kenmore Square, IQHQ’s attempts to convert the former Hotel Buckminster to lab space prompted a successful petition to declare as a landmark the site of the former Storyville jazz club. The Boston Landmarks Commission granted the property protected status in 2023.
Since then, IQHQ hasn’t submitted any additional development plans to the city for the site and two neighboring buildings it bought for $42.5 million in 2021.
And near Boston Landing in Brighton, IQHQ’s acquisition of an industrial building including the Sound Museum rehearsal studios prompted an outcry by musicians set to be displaced by the 410,000-square-foot lab development. Before receiving approval from the then-Boston Planning & Development Agency, IQHQ agreed to acquire a commercial building at 290 North Beacon St. for $18 million and donate it to the city to offset the displacement.
This month, the BPDA board approved a plan for IQHQ to donate the property to the Boston Housing Authority for affordable housing and 40,000 square feet of rehearsal space.
Fenway Center Status Up in the Air
IQHQ and The Green Companies joined local developer John Rosenthal of Meredith Management on the Massachusetts Turnpike parcel 7 lab project in 2021, signing a lease with Massachusetts Department of Transportation and receiving $165 million in financing from an affiliate of JPMorgan Chase. Developers estimated the cost of the project at $1 billion, including $80 million to construct the 2-acre deck above the Turnpike.
Steve Adams
The project is approved for a 22-story, 535,000-square-foot office-lab tower facing Beacon Street and 12-story office-lab building fronting on Brookline Avenue. The project has been envisioned for two decades, but delayed by previous financing delays and market cycles.
Through an outside spokesperson, IQHQ declined to comment on the timeline to begin construction of the Fenway Center buildings or 155 North Beacon St., and whether it plans to pursue development of the Hotel Buckminster site. The Green Cities and Rosenthal did not return messages.
Construction crews continue to work on the deck, albeit at a seemingly slow pace, and have nearly completely covered the section of highway between Beacon Street and Brookline Avenue.
In a 2021 interview with The San Diego Union-Tribune, IQHQ Co-CEO Tracy Murphy acknowledged the firm’s high-stakes strategy.
“We talk a lot about the behavior of sheep around here,” Murphy said. “People tend to do what everyone else is doing. To our credit – although it’s also riskier – we’ve done something a little different.”
