Arkansas-based Bank OZK has expanded its commercial real estate debt presence in San Diego with a $265 million construction loan for a life science project in the California city’s Sorrento Mesa submarket.
In a May 24 deal with Chicago-based sponsors Harrison Street and Sterling Bay, the bank was part of the capital stack for the first phase of Pacific Center. The estimated $650 million campus is expected to be completed in the next four years.
Andy Gloor, chief executive officer of Chicago-based developer and investor Sterling Bay, said securing a loan for new construction in the current climate is no small feat. “San Diego’s life sciences ecosystem is thriving, and the demand for modern, highly amenitized space is at critical max,” he added
The Pacific Center project – designed by San Francisco-based architecture company Gensler – will total five structures, including three lab buildings, a central plaza, mass-timber amenity center and parking structure. The first phase is expected to be tenant-ready in the fourth quarter of 2024.
The deal is Bank OZK’s third $100-million-plus life science construction financing over a seven-month span.
In December 2022, OZK teamed up with San Antonio, Texas-based Affinius Capital to originate a $202.6 million construction loan for a separate project in the same Sorrento Mesa submarket in San Diego. In January this year, OZK and Affinius linked up again on a $373 million construction loan for the first phase of a mixed-use life sciences development in South San Francisco.
San Diego has remained a fixture for life sciences lending in recent quarters even as interest rates have increased. The market has drawn new life science loans from Charlotte-based investment manager Barings within the last year.