The scientists, entrepreneurs and investors driving New York’s biotech boom.
As New York struggled through the worst of the coronavirus pandemic, one of the few sectors of the local economy that not only survived but thrived was the life sciences. But it wasn’t an overnight success story. Years ago, forward-thinking leaders saw other major cities emerging as biotech hot spots and identified the potential – a highly educated workforce, world-class health care institutions, real estate developers and Wall Street types eager to invest – to cultivate a major life sciences hub in New York. Existing academic and research centers created collaborative partnerships. New biotech incubators were launched to support promising startups. Investors and economic development agencies provided millions of dollars for researchers and entrepreneurs to translate scientific discoveries into real-world applications – and high-paying jobs.
City & State’s first Life Sciences Power 50 – researched and written by City & State’s Jon Lentz and Kay Dervishi – recognizes many of the key individuals behind the sector’s remarkable growth in New York, including scientists, venture capitalists, government officials, health care executives, real estate developers, philanthropists and others who have positioned New York as a biotech center on track to rival those in Boston and San Francisco.
Charles Bendit & Paul Pariser
Co-Founders and co-CEOs, Taconic Partners
In October, The New York Times published an in-depth feature on how the life sciences sector is a bright spot in Manhattan’s “battered” office market. The publication cited Taconic Partners’ planned conversion of an old West Side auto showroom into yet another life sciences hub as the latest example of biotech investment buoying the real estate industry. Taconic Partners was founded in 1997 by Charles Bendit and Paul Pariser, who still lead the company today as co-CEOs. In the spring, they completed a $600 million recapitalization for the new hub.
Taconic Partners and Nuveen Real Estate closed on a $260 million fund to pick up real estate around New York City, hoping to create a portfolio valued at more than $1 billion, Commercial Observer has learned.
The fund, dubbed the New York City Property Fund II, plans to target “value-add” opportunities around the five boroughs and parts of New Jersey, said Chris Balestra, co-president and chief investment officer for Taconic Partners. Nuveen and Taconic are not limiting themselves to any asset classes and are looking at office, life sciences and last-mile distribution properties.
“It’s for any asset class that we can make those returns on,” Balestra said. “If an industrial deal pops up and it makes sense to do it, [we’ll do it].”
Balestra could not say which companies participated in the fundraising, only that it included several European pension funds.
The joint partners started fundraising in 2018 and closed on the fund’s first project the next year, a former auto dealership at 125 West End Avenue the pair picked up for $230 million with plans to turn it into a life sciences hub.
Nuveen and Taconic planned to close on the rest of the fund in 2020, but the coronavirus pandemic hit and made investors wary about jumping into the New York City market.
“That was a tough time to raise,” Nadir Settles, head of Nuveen’s New York regional office, said. “So many investment commitments were still nervous about New York.”
The pair had to lower their target goal for the fund, originally $500 million, but was still able to close on it this month. Settles said the joint venture’s foothold in the city’s growing life sciences market — and the $600 million capitalization for 125 West End they landed in March — helped ease investors’ concerns about the New York market and any amount raised during the pandemic is a good thing.
“There hasn’t been a lot of fundraising in the time of COVID,” Settles said. “But we were still able to raise the lion’s share of the capital. That is a huge win.”
The pair are now actively seeking opportunities around the city to deploy the rest of the fund’s capital and hope to close on its next acquisition by the end of the year.
Despite foreign investors wavering on New York City’s future, both Balestra and Settles said their companies never thought about abandoning the fundraise.
Colleen Wenke once had a career in medicine in her sights.
But, she didn’t anticipate her head would be turned quite so dramatically by a temp job at one of New York City’s leading development and investment firms: Taconic Partners. Twenty years later, she’s not only still there, she’s holding the reins.
In March, she and Chris Balestra were named co-presidents of Taconic. Wenke describes their dynamic as “exceptionally complementary,” with Balestra focusing on investments and finance, while Wenke leads development and construction for the firm.
As a firm, Taconic has always been especially bullish on New York City, and the two transitioned into their new roles at an exciting time for the industry, and for the recovery of their home base. Taconic’s diverse portfolio — which includes a significant head start and footprint in New York City’s life sciences sector — was well-positioned for a fast-moving crisis. Now, as an “opportunity firm” with an entrepreneurial spirit, it’s ready for all of the action that the rebound will bring.
Wenke — who was recently awarded the Excellence in Field Award for Development & Construction at Commercial Observer’s “Innovations Powered By Women: Celebrating the Women Rebuilding Our National Workforce” forum — discussed her path to Taconic and why there’s never a dull moment in real estate development.
Commercial Observer: You were promoted to co-president three months ago. How have those first few months been, and what are the biggest changes in terms of your day-to-day role?
Colleen Wenke: The promotion was announced a handful of months ago, but I’m in my 20th year here at Taconic and the conversation started many years ago. I’ve worn several different hats here over my tenure, and so this felt like an organic, natural progression because of my legacy, curiosity, personality and the evolution of Taconic’s timeline.
Taconic was started by two partners [Charles Bendit and Paul Pariser]. They recognized that there’s a very strong executive team that has been here for many years, and broadening the breadth of that team and allowing a bit more collaboration and control over what’s happening, positions us well for the future. So, it’s an exciting time and also certainly challenging trying to balance a lot of different responsibilities. I continue to oversee our development business and our development advisory business — which is a third-party business I started a handful of years ago —as well as overseeing corporate operations, and also forward-looking new business. So, it’s diverse, and I’m looking toward the future.
Let’s rewind to the very beginning. Where did you grow up?
I’m a native New Yorker from Queens and I grew up in a town called Floral Park, all the way adjacent to the Long Island border. My father was a firefighter and an ironworker, and at the time he joined [the FDNY], you had to live within the five boroughs of New York City.
Are you the first in your family to go into the real estate business?
Yes. Ironworkers certainly touch real estate through the buildings, but I always had a natural curiosity for creativity and design. And being a native New Yorker, I was always looking around and fascinated by our city. But it wasn’t until I actually landed at a real estate firm that I started peeling back the layers of what it means to be in real estate.
When I was in school, I thought I wanted to be a doctor and I was focused on the medical field. But, I took a little bit of time off, was exposed to the real estate industry, and the rest is history.
What was your first role?
It was right here — I was a temp at Taconic! I was here for a handful of months, and basically said [to management]: “I think something fantastic and really exciting is happening here, and I think I can add value.” We were a small firm at that moment, and I was just persistent. At the time, we had projects not only in New York, but in Atlanta and in Chicago. There were only a handful of people, but they were traveling during the week to those different projects. And so, I’d like to think that I helped to hold down the fort during those times of travel and other things.
I was really curious. I was always reading and listening, so I was learning. And then, I just built and built from there.
How would you describe the evolution of your role since those early days?
I realized very early on that because I didn’t have a finance background, and because I wasn’t an architect, I didn’t have the education to support some of the dialogue that was happening in these conference rooms and on conference calls. So, I went back and I got my master’s degree early in my career. I think that provided the building blocks to really accelerate the learning curve.
In the early days, I was supporting whatever needed to get done. And then, through the years, there was an evolution from being asked to do something and it being task-focused, to me leading the conversation forward on a project. So, through the years, I’ve done everything from basic project management work through asset management work, marketing, leasing, PR — whatever it took to get something accomplished. I wore all those different hats as the project life cycle demanded them.
I’d imagine experiencing all these different buckets only makes you a stronger leader, because you understand exactly what goes into each part of a project’s process?
Exactly, and I think one of the things that I like most about my new role is building teams and people. I think it’s fascinating to figure out the chemistry of people working together toward a common goal. In development, it’s such a grind. And so, if you can figure out how people are fulfilled and empowered to do what they’re being asked to do toward fulfilling a business plan or project, they start to take ownership over it. I think that’s how people basically rise through the ranks; they start to really have opinions and are more forward facing.
Getting your master’s while working must have been tough.
It was absolute chaos [laughs]. I would get the evening coursework, and often debate what I was being instructed, because I’d say, “Well, actually, it wouldn’t go that way in the real world!” It took me about three years, and I’m happy that I did it. It was a different point in my life. I was doing it simultaneously while working on one of our buildings at 401 West 14th Street. It’s only three blocks from where our offices are. And so, I’d work, grab a bite, go to class, come back, walk past the project, come back to the office, and then go home, wake up and start over again.
Was there a career-defining moment when you knew you were in real estate development for the long term?
Definitely. Despite having to be a generalist in development, you also align with certain parts of the tasks at hand more closely. So, for me, our 401 West 14th Street project — which is now leased by Apple and a few high-profile tenants — was really when the transition occurred. It shifted from me being asked to do certain things to me leading them, and starting to have instincts about how you get ahead of what you need to block and tackle on a daily basis. So, that was pivotal for me.
Then, when we were awarded Essex Crossing and the Seward Park project on the Lower East Side. We’re nine years into that project now, and just getting in a room and working with our partners, figuring out how we were going to execute on the project and bring the images to life, then going through that process and getting our first TCOs, lease-up and the first sales completed.
We’re now completing the second phase of that project, and the fact that seven buildings on the Lower East Side have been developed over the past handful of years is really fulfilling, and I’m really proud. There are so many hands involved in a project; it’s really not a one-person type of work. So, when you can work toward a common purpose, and then sign off on it, it’s an exceptional feeling.
How did the Essex Crossing project first come together?
One of the last big pushes of the Bloomberg administration was to rezone that area of the Lower East Side. They rezoned it and then went out to RFP to the private developer community. In the past, we hadn’t responded to [requests for proposals] — it wasn’t really our wheelhouse. But, it’s such a relationship business, and folks who had previously worked together here with some of our now-partners, called up and said, “Can we work together? Because this is a massive undertaking.” We flipped through and thought, “Yes. This is exceptional.” I mean, when do you ever get the opportunity to touch such a large piece of New York City in your career?
The team’s worked exceptionally hard on it, and one of the amazing attributes of Essex Crossing is the Market Line, this subgrade marketplace that’s connected by three city blocks. And that was really where the value-add aspect of our team came forward, because you could start to assign value to subgrade space, where it’s more traditionally mechanical and back-of-house uses. And so, it’s a market-making project, and it’s really exceptional today — you can walk in the park, we have rentals, we have Trader Joe’s, and we have 350,000 square feet of Class A office space.
Is Essex Crossing top of your priority list today?
So, certainly, Essex Crossing takes up a big chunk of time. The office space is just launching, and we also launched condo sales at One Essex Crossing during the pandemic. We’re also embarking on a large project up in Inwood and just into our planning phase up there. We’re active in that community, and looking for new opportunities up there. I also have a multifamily building on 43rd Street, where we’re demolishing an existing asset and will be in foundations hopefully by year-end. So, we’re busy on the project front.
And, then, we’re thinking about our people and the return to office, and what will be the new driving forces of the company.
Do you think you’re going to be even more active in the life sciences space, post-COVID?
There’s so much capital being injected into the life science market right now. Being early adapters, and having delivered lab space successfully to the marketplace, allows us to execute on a life science plan when the right opportunities come up. But not every asset and not every repositioning is appropriate for a life science undertaking.
One of the things that has resonated with me throughout my years at Taconic is responsible underwriting, responsible investment, and making sure that you can actually execute on what’s being underwritten — not getting caught up in the wave of what the market is doing. So, we’re out looking, and we have just shy of $2 billion underway already invested in the life science sector. When the right opportunities come up that fit with our disciplined investment structure, we’ll be happy to execute on them.
Has the pandemic made you view any asset classes differently?
We’re an opportunity firm. Despite being larger than we were when I first started, we’re entrepreneurial in spirit. So, we’re studying the markets and certainly always looking for new opportunities. Our platform was well-diversified prior to the pandemic, in terms of the balance between residential and commercial and life science.
I — and we — still very strongly believe in New York City, and, despite some of the negative headlines during the COVID era, we remain focused on it. We’ve expanded our geographic area a little bit, but what comes of that is to be determined. We’ve certainly looked at more industrial-type properties and other things as we pivot some of our focus. But, again, I think it just boils down to our culture and that entrepreneurial, opportunistic lens that we bring to the table.
How was your personal experience of working remotely?
I have to say, I’m really proud of our team. We weren’t the most forward-facing technology-focused company in terms of Zoom and virtual meetings, but we proceeded almost without interruption. Some of the early doom-and-gloom thoughts and downside scenarios that we were running both on our investments and our Taconic platform didn’t come to fruition, and I think it’s because people adapted and they did what was necessary.
I personally prefer to work in the office. I have two young children at home and it just complicates matters. Additionally, I have never claimed to be a teacher. And so, virtual schooling was very challenging. So, for some of the things that have returned, both from a school perspective and a return to office, I’m very thankful.
Any surprises within Taconic’s portfolio through the pandemic?
At the beginning of the pandemic, the world was so uncertain and it felt like the rug had been pulled out from everything. So, we certainly spent a responsible amount of time on a weekly basis going through each and every investment, and analyzing the downside and upside potential. We certainly had to adjust for the market, on the multifamily side with increased concessions, but we got ahead of it. There was a lot of dialogue, there were a lot of conversations, and some of them are still ongoing. But, we fared well in the storm.
And, I think, again, that’s why I’m feeling so optimistic about what the future holds. Because, if you look back a year ago, from where we stand today, it’s night and day.
Any key takeaways from this crisis?
This is a people business. It’s also an investment business, a building business, a marketing business, and lots of other things. But, when you boil it down, it’s about people. And so, we focused heavily on our internal teams, we focused heavily on making sure our partners were well, making sure investments were sound, and making sure that we almost over-communicated to make sure that nothing was brewing in the background that may come out and catch us.
And so, we just made sure that we had an open dialogue on a consistent basis, as we analyzed and figured things out. It’s something that we’ve done here for many, many years — with lenders, partners and tenants. And it’s something that we did successfully during COVID — probably at a heightened level —and something that we will continue to do. It’s really one of the key ingredients of our industry.
Another key aspect of the crisis was an overdue, increased focus on diversity, equity and inclusion in our industry. What are your thoughts on how far we’ve come, and how far we’ve still to go?
I’m happy to see that the conversation is happening. And, we’re at a point where progressive change can be made for more inclusion. I think diversity is not only about recruiting new talent, but it’s also developing talent internally and providing similar opportunities to others who are here, whether it’s a female or whether it’s somebody in the Black and brown communities. So, I’m excited by the dialogue that is happening. I think it’s incredibly important, but I also think that it shouldn’t [supplant] some of the hard work and effort that it takes to accomplish what needs to get done. I’m glad it’s a topic that is being discussed, but I think there is still a fair amount of work to do.
Have you had any key mentors throughout your career?
Paul and Charlie here at Taconic were absolutely inspirational throughout my career here. I started my early days at Taconic under the mentorship of a woman named Caroline Vary, who just was a fantastic leader and teacher, and who helped to provide opportunities and answer all of the questions that I had in the early days.
What’s your favorite part of the job today?
The diversity of tasks. It’s something that I think turned me on to real estate development in the early days. You can go from being in a meeting with a group of subcontractors, to sitting with a partner in a creative meeting, to talking about a new underwriting, and so many other things.
And that dynamic is a daily occurrence. I can say with certainty that every day that I try to plan out never happens as intended. There’s always something that comes up, that causes a blip. And so, being able to have a clear head, respond to the challenges, and persevere comes fairly naturally to me. And I enjoy that challenge.
Taconic Partners and Silverstein Properties announced in April that Bill Gates-backed c16 Biosciences Inc. will establish its executive headquarters and research lab at Hudson Research Center, a 320,000 square-foot, mixed-use building at 619 W. 54th St.
“Combining the city’s focus on biotechnology with the fact that most of the world’s major consumer brands have headquarters here, I believe NYC is the new consumer biotech capital of the world,” said Shara Ticku, co-founder and CEO of c16 Biosciences.
As a biomanufacturing company, c16 Biosciences uses microbiology to brew sustainable alternatives to palm oil. The current production for palm oil—a $61 billion industry—carries negative environmental consequences. During the summer, c16 Biosciences will move into a 20,000-square-foot space on the seventh floor of the center. The company is moving from the NYU Langone biotech coworking space in SoHo after having completed a $20 million Series A funding round, led by Gates’ Breakthrough Energy venture.
“Hudson Research Center’s pre-built lab is perfectly suited for what we do and where our company is headed,” said Ticku. “Its location, flexible lab spaces and amenities made the building an ideal fit for our team.
“New York has a hustle and energy like no other city in the United States,” Ticku said, “and if you want to build something big and disruptive—like we do, by ending deforestation—New York is the best place in the world to do it.”
The company joins life science tenants Hibercell and the New York Stem Cell Foundation at the Hudson Research Center. The developers expect the building to be fully occupied in the next year.
“There is incredible momentum in the life sciences sector and a severe lack of ready-to-go labs,” said Matthew Weir, executive vice president at Taconic Partners. “I wish we could build these labs faster—that is how active things are right now.”
The presence of world-class academic institutions, nearby pharmaceutical companies and an incredible talent pool are fueling the biotech field in the city, experts say. Because labs are in such short supply, pricing is at a premium to office rentals, a trend that could persist for some time.
“At the moment, close to half of our commercial activity is in life sciences,” Weir said. “I think it will be that way moving forward.”
In March the Icahn School of Medicine at Mount Sinai purchased 165,000 square feet for a life-sciences hub at 787 11th Ave. on the Far West Side, which is evolving as a biotech cluster. Taconic recently began construction on a 400,000- square-foot building at 125 West End Ave. The developer expects it to be completed in the first quarter of 2023.
Charles Bendit, Paul Pariser, Chris Balestra and Colleen Wenke
Co-CEO; Co-CEO; Co-President; and Co-President at Taconic Partners
Post-COVID, it seems like everyone and their mother is trying to convert offices to life sciences. But firms like Taconic had established a firm and enviable footing in the space pre-COVID, and that’s only a small part of their repertoire.
“It was certainly a challenging year out of the gate, but I think we adapted pretty quickly,” Chris Balestra said. “We’re definitely looking to expand our [life sciences] platform as we go forward, and we’re evaluating several opportunities right now. The supply/demand imbalance in the city is extreme and we think that there’s a lot of run room, but not every asset can become life sciences. We have a keen eye as to what can be transformed.”
While Balestra describes Taconic as being “a little less active than in a normal year” during COVID, the deal headlines beg to differ.
In March, the firm celebrated a groundbreaking for National Urban League’s $242 million Harlem headquarters, plus a $600 million capitalization for its state-of-the-art, life sciences development at 125 West End Avenue. In December, it sealed a $205 million refinance for Hudson Research Center, its 322,000-square-foot, mixed-use property at 619 West 54th Street; and, in April, it bagged the Bill Gates-backed biotech startup C16 Biosciences as a tenant for that same property. Not too shabby.
Colleen Wenke describes the biggest challenge of the past year as the uncertainty: “First and foremost, keeping our people safe, making sure that we were responding to what was happening in the world at large, and making sure that our investments were sound,” she said. “I think when you’re being inundated with uncertainty, you have to figure out how to calm the waters and figure out what the appropriate, strategic best move is.”
Balestra and Wenke were named co-presidents of the firm this past March, and oversee more of the day-to-day operations, freeing up Charles Bendit and Paul Pariser to focus on strategy, deals and opportunities.
“Chris and I — and many of the other executives here — have had a very long tenure,” Wenke said. “Our co-founders created an exceptional platform, and were excited to diversify in order to figure out where new opportunities can be uncovered.”
C16 Biosciences will move into 20,000 square feet of pre-built lab and office space on the seventh floor of the building at the end of this summer or early fall. Asking rents were in the mid- to high-$90s on a triple-net basis.
C16 Biosciences’ move into the seven-year lease from an NYU Langone-run biotech co-working space in Hudson Square comes after the company closed on a $20 million, Series A investment round led by Gates’ Breakthrough Energy Ventures last year. Its expansion is another marker of the booming life sciences sector in New York.
“The West Side of Manhattan, where this building is located, is one of the hottest clusters for life science in New York City,” Taconic Partners Executive Vice President Matthew Weir told Commercial Observer. “We have the flexibility to accommodate a variety of users and I think that this proves it. … The building is creating best-in-class spaces that are flexible in their design engineering, as well as lease terms and things of that nature, to draw tenants that have different operations.”
Weir said Taconic was working to lease the remaining 80,000 square feet in Hudson Research Center and had received a lot of interest, as New York begins to gain a foothold as a life sciences hub. Silverstein Properties and Taconic were represented by Jonathan Schifrin and Alessio Tropeano of CBRE and Weir in the deal. C16 Biosciences was represented by John Isaacs of CBRE.
“We were thrilled to be able to represent C16 in relocating to 619 West 54th street, which is building a thriving life science ecosystem,” Isaacs said.
The New York City Economic Development Corporation was also excited by the move, with the acting chief linking a post-pandemic recovery to a strong life sciences sector.
“Building a successful recovery means ensuring the life science sector is equipped with the greatest potential for cutting-edge technologies and treatments for New Yorkers,” Rachel Loeb, acting president of the city’s EDC, said in a press release. “Companies like c16 Bioscience Inc. establishing its headquarters here is an example of the strength of the life sciences ecosystem and the city’s potential as a biomanufacturing hub. With a diverse talent pool, and advancements in technology, New York City is uniquely positioned to grow as a global leader in life sciences research and innovation.”
Landlords and designers are adding more outdoor space to office buildings, so employees can actually work outside.
Office life is about to move outdoors.
In buildings across the country, new and renovated offices are being designed to include more options for workers to get away from their desks and go outside. According to designers, developers, and landlords, it’s an emerging trend that could shake up the way workplaces look and feel for years to come.
“Access to daylight, good fresh air—those kinds of things are really tangible to the tenants,” says Marc Fairbrother, vice president of the architecture firm CallisonRTKL. “We are headed in those directions where it’s more about the user experience than efficiency and the cost of the product.”
CallisonRTKL has several projects in the works that are putting a premium on outdoor space. Common building amenities such as fitness centers and ground-floor cafés are being augmented with new spaces for outdoor breaks and even outdoor working. One project currently in the works, a new office building in Arlington, Virginia, for the global construction company Skanska, includes a variety of outdoor spaces throughout the building. At street level, there’s a quarter-acre parklike space with seating and shaded areas that can be used by the public or by office workers. On the roof, there’s a large patio space, with various seating options that can function as lunchtime getaways, informal working areas, or spots for open-air presentations. The roof also includes an enclosed central conference room that can host both formal board meetings and after-hours cocktail receptions.
They even added outdoor spaces on a part of the office that has traditionally been unpopular. “The second floor, which is always the hardest to lease in office space, is where we put the terraces,” says Fairbrother.
Another of the firm’s projects, an office building in Tulsa that’s slated to open in 2023, was designed to include terraces on every floor. CallisonRTKL principal Dallas Branch says it’s a new approach, and one that the designers had to tinker with before it felt right. “We’re not used to seeing that in offices. When we first laid it out, it seemed like a residential building because it looked like we had balconies everywhere,” says Branch. “We had to tweak the design a bit to keep that office building look.” As a result, every floor will have about 1,500 square feet of terrace space for the tenants.
The move toward the outdoors has been underway for years, but unlike in the past, this new generation of outdoor spaces is less about escape than about adding new types of spaces for people to work and interact in.
“In the early days, these were meant more for social gatherings, but you’re starting to see even the idea of outdoor conference rooms,” says Matt Weir, of the New York-based developer and landlord Taconic Partners. “You’re laying out furniture, you’re creating privacy with greenery, you’re creating alcoves where you can put a table and folks could have a board meeting or a presentation.”
“You’re seeing the office layout function migrate to these outdoor spaces,” says Weir.
Taconic is now finishing up several projects in New York that embrace this. One is the renovation of 440 9th Avenue, a building from 1927 with distinctive wedding cake-style setbacks on its upper floors. To create more of a connection to these preexisting outdoor spaces, Taconic has added NanaWalls, sliding and folding walls that can be opened.
Adding these kinds of spaces can be expensive, Weir says. For new rooftop spaces, elevator shafts have to be extended, as do emergency stairwells to meet fire and safety codes. New shading and planters may also require structural renovations to support the additional weight. But in many instances, the costs of adding these spaces can be offset with higher rents. “The buildings that provide these spaces certainly carry a premium versus buildings that don’t,” says Weir. “And I think it’s becoming one of those standard, check-the-box things that tenants are looking for. If you’re not able to provide this, you’re at a competitive disadvantage.”
In expensive markets such as New York, landlords understand that these kinds of spaces are appealing to workers and also to the companies that are trying to attract and retain them. With office vacancy rates higher than normal during the pandemic, landlords and building owners know they need to try harder to lure in tenants.
Though COVID-19 has changed the way a lot of people think about office environments, Weir says this trend isn’t necessarily a pandemic reaction; it sometimes reflects a new way of working. “We are doing outdoor spaces in almost every single one of our projects. That’s how important we believe they are,” he says.
Others say providing these spaces is just a new part of doing business. “Some of this stuff may be table stakes,” says Nadir Settles, managing director for the real estate investment manager Nuveen Real Estate. “What would you rather have, an empty building or a building that you’re putting some costs into but you’re filling?”
One of the company’s New York buildings is in the process of adding this kind of outdoor amenity. On its 22nd floor, the building at 730 Third Avenue will soon have a 7,000-square-foot landscaped terrace. Designed by the global architecture firm Gensler, it’s intended to provide space for events and cocktail hours, but also what Settles notes can be a third place.
Settles expects new buildings to have these kinds of spaces incorporated into their designs going forward. For existing buildings, those with outdoor spaces are likely to be more popular with both tenants and landlords. “Of course, if we’re out doing an acquisition right now, and we can buy a building with no terraces or a building with terraces, and we have to pay a little more, we would do that because that’s what tenants are going to want, and you can fill that building,” says Settles. “I think the bar has been raised.”
As for CallisonRTKL, Fairbrother says he’s hoping to do some post-occupancy analysis of new buildings with outdoor spaces to see exactly how they’re being used, and whether they have any impact on worker productivity.
“That would be the real meaningful thing, is to prove it economically. Yes, you spent some money to do this, you created a better environment, and see here the payoff is better productivity,” he says. “I think we have a little more work to do on this and it’s going to evolve, but I think we’re going to be using science to help us decide what’s valuable and what’s not.”
Developer Taconic Partners named longtime staffers Chris Balestra and Colleen Wenke as presidents, the first time the firm has had the role since it was founded 24 years ago, Commercial Observer has learned.
“We’re thinking about not necessarily succession, but how do we provide for the future of this firm and for the future of all of them who have invested their careers in Taconic?” Charles Bendit said. “It was a natural evolution to come to this point.”
“Charlie and I have no plans of giving up our roles,” Paul Pariser added. “But this is a way of really strengthening the organization.”
Along with Balestra and Wenke being named co-presidents, Taconic also promoted senior vice president Matt Weir as executive vice president.
Wenke joined Taconic fresh out of college 20 years ago, and led the firm’s development and construction practice, overseeing both ground-up and restoration projects, according to Taconic.
Balestra joined Taconic in 2005, previously served as a bank officer for M&T Bank, and has been involved in nearly $4 billion of real estate acquisitions in New York City while at Taconic.
As part of their new roles, Wenke and Balestra will continue to oversee more of the day-to-day operations of Taconic, freeing up Bendit and Pariser to focus on strategy, deals and new opportunities.
“I think they do a better job at what they do than I do,” Bendit said. “We take great pride in their accomplishment and how they’ve grown into the position they’re stepping into.”
Bendit and Pariser said the firm is also focused on finishing up the second phase of the Lower East Side’s Essex Crossing development this year, along with potentially starting a new multifamily project in Inwood, looking to expand its development advisory business, and actively invest in new projects.
New York City’s next Life Sciences hub is off to the races with construction financing plus a new Equity Partner
Taconic Partners and Nuveen Real Estate have sealed a $600 million capitalization for 125 West End Avenue, the partnership’s state-of-the-art, life sciences development on Manhattan’s West Side, Commercial Observer has learned.
The deal closed today.
As part of the capitalization, LaSalle Investment Management — on behalf of its underlying limited partner —has joined as an equity partner, and funds managed by Apollo Global Management and Oaktree Management have provided $393 million in construction financing for the project.
The eight-story, 400,000-square-foot property was originally constructed as an automotive facility by Chrysler Corporation, before becoming part of the Walt Disney/ABC campus and New York headquarters in 1985. Taconic and Nuveen acquired the asset in 2019, and are now redeveloping the former office space into a dynamic life sciences building that will include wet and dry labs, engineering zones, conference centers and event space.
“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,” Taconic President and Chief Investment Officer Chris Balestra, said. “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.”
“Life sciences is a sector that continues to evolve and show promise,” Nadir Settles, managing director of Nuveen Real Estate, said. “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.”
“We’re looking for more and I think we will do more,” Settles previously told CO. “I think it’s a space that certainly has a tailwind and it certainly has a lack of supply in the market. It has the talent here, and so, if we can do more of it, we certainly want to do more and we’re evaluating opportunities now.”
The transaction marks another step forward in Taconic’s $2 billion planned investment into the New York City life sciences market. The property at 125 West End Avenue sits only 10 blocks north of Taconic’s Hudson Research Center at 619 West 54th Street, further solidifying the West Side of Manhattan as a life sciences cluster, as well as the firm’s control of a critical mass of life sciences properties in the area.
Once part of the nine-building, 1.7 million-square-foot ABC Campus acquired by SIlverstein Properties in 2018, 125 West End Avenue was carved out, along with 320 West 66th Street and Lot 61 — the three assets collectively known as the West End Campus — and sold to Taconic and Nuveen a year later.
Following a two-year, sale-leaseback agreement, ABC vacated its space at 125 West End Avenue property this January, and construction commenced in February. The redevelopment will involve a comprehensive renovation of the building, including a new mechanical plant with purpose-built lab infrastructure, a new high-performance facade, a roof terrace, conference center and new lobby.
Architect Perkins+Will New York and engineering firm Jaros, Baum & Bolles (JB&B) are leading its design. JRM Construction Management is the project’s construction manager. Construction is expected to wrap in 2023.
LaSalle’s equity investment was negotiated by CBRE’s William Shanahan, Darcy Stacom and Steven Purpura. JLL Capital Markets’ Evan Pariser and Geoff Goldstein arranged the construction loan.
“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,” Stu Sziklas, LaSalle’s U.S. head of custom accounts, said. “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.”
“New York used to be such a finance hub, then we saw TAMI, and now life sciences are coming in,” he said. “So, it’s a really fascinating evolution of the city. And that’s ultimately Taconic’s fundamental thesis: Why have all these sectors been drawn here, to grow and flourish here? We would say it’s ultimately due to the fundamental premise that talent wants to be here.”
Trader Joe’s will soon open a new grocery store in Harlem, the chain’s first location in Upper Manhattan. The store will occupy 28,000 square feet of ground-floor space of the forthcoming Urban League Empowerment Center at 121 West 125th Street.
Developers responsible for the new property include The Prusik Group, BRP Companies, L+M Development Partners, and Taconic Partners. When complete, the Urban League Empowerment Center will also house the new headquarters and conference center for the National Urban League, as well as the Urban Civil Rights Experience Museum, New York State’s first civil rights museum, and a new Target.
Additional components will include 170 units of supportive and affordable housing for low-income New Yorkers making 30 to 80 percent of Area Median Income.
“This continues to be a dream project for our development team,” said S. Andrew Katz, principal of The Prusik Group. “We are beyond thrilled to bring the National Urban League back to Harlem, open the first civil rights museum in the state, and now, one of most beloved grocery stores in the country alongside it. We’re looking forward to welcoming the community to what will be a cultural and commercial hub for Harlem in 2023.”
Designed by Beyer Blinder Belle, the entire structure will comprise 414,000 square feet and top out at 17 stories. As revealed by YIMBY in August, renderings of the project depict a six-story podium with floor-to-ceiling windows and a punched-in balcony outlined in darker glass along West 125th Street. Above the podium levels, the residential tower is set back from the West 125th Street elevation and overlooks what will likely be private recreational area for building tenants.