Jumbo, Apollo score $57m life science conversion financing package

The Colliers-arranged financing underscores the push to convert office space into new uses.

Jumbo Capital and Apollo Group have obtained $57.7 million in financing from Cambridge Savings Bank to fund a planned conversion of a Boston-area office property into a life sciences-oriented manufacturing facility.  

Colliers arranged the financing on 30 Dan Road as well as the $21 million sale of the Canton, Massachusetts property. The five-year, two-tranche financing will fund the acquisition of the property into a Current Good Manufacturing biotech facility, a distinction certified by the Food and Drug Administration. 

“[The sponsor] gets proceeds up front to facilitate the acquisition of the building, and also lender financing for the execution of their business plan with a sharing of hard costs, soft costs, tenant improvements and leasing commissions,” said Bryan Koop, vice-president at Colliers’ Boston Capital Markets team. 

Interest rate uncertainty made the process longer and more complex than it would have been prior to the Federal Reserve’s latest push to drive down inflation.  

“Given the volatility in the market, the range of feedback certainly was wide,” Koop said, adding that the pricing disparity was in the range of about 150 basis points of spread. “In times when volatility is high and lender feedback is all over the place, we can effectively make a market for our clients.” 

Growing life science hub 

The Boston area, home to multiple top research universities, is a rapidly growing hub of biotech activity. This is good news for the life science sector in the area, which Frank Petz, managing director, investment sales at Colliers, likened to Silicon Valley. “Boston has become that leader in life science,” Koop added. 

And despite a general decline in acquisitions and originations in the sector, Petz is still very bullish on life science for the long haul.  “We do feel activity slowed down. But we think it’s a pause, not a dead end,” he said.