Despite the general softening of the local life science real estate market, a major pension fund has decided to back Somerville’s latest spec lab high-rise.
Oxford Properties Group, an arm of the pension fund for government employees in the Canadian province of Ontario, is financing 15 McGrath Highway, a 262,000-square-foot, 9-story development by DLJ Real Estate Capital Partners and Leggat McCall Properties.
The property next to the massive Cambridge Crossing life science and residential development received city zoning approvals earlier this year and delivery is expected in late 2024.
JLL Capital Markets arranged the $230 million construction loan, with senior managing director Brett Paulsrud, senior director Henry Schaffer and associate Mike Shepard representing the borrowers.
A $175.5 million mortgage for the property issued by Oxford was also recorded July 27 at the Middlesex South Registry of Deeds.
“Greater Boston continues to be ranked among the top life sciences markets in the world,” Paulsrud said in a statement. “As a result, liquidity for projects with best-in-class sponsorship and location, such as 15 McGrath, remains intact and active.”
A recent research report from commercial real estate brokerage Newmark said that up to 65 percent of the Greater Boston region’s 40 million-square-foot pipeline of lab space could get delayed, curtailed or cancelled as a result of troubles in the biotech industry. With interest rates up sharply and economic volatility worrying investors, biotech start-ups are having a harder time landing financing for the rapid expansions that have heretofore fueled the explosive growth of Massachusetts’ life science real estate industry.