Deerfield Management said today it will invest $635 million toward a life-sciences campus in New York City—part of $2 billion the investment management firm said it will commit to research and seed funding by 2030, toward advancing the development of new treatments.
Deerfield plans to develop its Big Apple campus at its newly-acquired 345 Park Avenue South, a 12-story, approximately 300,000-square-foot Manhattan building that the firm is renovating. More than two-thirds of the renovated space—over 200,000 square feet—will be usable as wet labs.
In addition to turnkey lab space, Deerfield envisions the campus including engineering and computing space, as well as other amenities and supportive services. Among those amenities and services will be a healthcare-focused incubator designed to support startups at all stages, to be overseen by MATTER, a Chicago-based healthcare-focused incubator manager.
Deerfield said incubator companies will be able to draw upon the firm’s support capabilities—which include legal, finance, information technology, human resources, and market research—as well as MATTER’s programs for training early-stage C-suite executives and introducing startups to organizations for mentorship, collaboration, and even potential acquisition.
“Creating an environment in which innovative thinking, ground-breaking advances in scientific discovery and where the development of new paradigms of patient care will occur every day is tremendously exciting,” James Flynn, managing partner of Deerfield, said in a statement. “We are proud to be part of a community of people in New York who strive to save and extend lives.”
The life-sci campus is projected to open in early 2021, and foster creation of 1,400 jobs, according to the public-private New York City Economic Development Corp. (NYCEDC), which said today it will partner with Deerfield in creating the campus.
$92M in economic incentives
NYCEDC has committed $92 million over 20 years in economic incentives toward the project, while Deerfield has committed $30 million toward developing programs with the economic development agency that will be designed to prepare New Yorkers for life-sci careers.
In addition to advancing workforce development, NYCEDC said, the programs will also promote diversity and inclusion, and support careers of nearly 5,000 New Yorkers in the industry. The $30 million will help enable NYCEDC to expand its LifeSci NYC Internship program, and Deerfield to expand its existing LifeSci NYC Fellows and Break into the Boardroom programs, as well as launch a new Women in Science program, designed to train women on how to commercialize their potentially lifesaving discoveries and create companies.
“We are thrilled that our partnership with Deerfield will not only create quality jobs for New Yorkers but will also help provide a home for emerging companies to develop breakthrough scientific discoveries,” stated NYCEDC president and CEO James Patchett. “New York City already has the best research institutions in the world. By investing in this Life Sciences campus to bring new lab space and programming for healthcare and early-stage biotech companies, we can strengthen the City’s position as a global leader in life sciences.”
New York and neighboring New Jersey maintained their No. 3 ranking among the nation’s top-tier life-sci hubs in GEN’s updated A-List of “Top 10 U.S. Biopharma Clusters,” published September 23. GEN included Deerfield among developers that have stepped up efforts to create new spaces for biopharma and other life-sci companies.
Those developers include Larry Silverstein’s Silverstein Properties, which has joined with Taconic Investment Partners to convert 619 West 54th Street into the Hudson Research Center; and Alexandria Real Estate Equities, which is constructing a third building at its Alexandria Life Science Center-New York City in Manhattan, and has acquired two properties for redevelopment across the East River in Long Island City, Queens.
Outgrowth of LifeSciNYC, ‘Hub’ plan
According to NYCEDC, the Deerfield campus will be the first in a series of infrastructure and programming investments to grow out of New York City Mayor Bill de Blasio (D)’s LifeSci NYC, a 10-year, $500 million effort to establish the Big Apple as a top-tier biopharma mecca with 16,000 new life sciences jobs and up to 3 million square feet of new space for life-sci companies and institutions.
Deerfield was among 24 entities that responded last year to NYCEDC’s “Request for Expressions of Interest” by potential developers and others interested in creating a $100 million “Applied Life Sciences Hub,” The Wall Street Journal reported.
Deerfield said it has closed on $540 million in financing led by Blackstone Real Estate, toward acquiring and renovating 345 Park Avenue South.
The investment heightens Blackstone’s presence in life sciences real estate since Blackstone owns BioMed Realty—whose regional development plans include renovating 97,000 square feet of lab space for smaller biotechs about 21 miles north of Times Square at Ardsley (NY) Park. On August 29, the Westchester County (NY) Industrial Development Agency agreed in principle to assist BioMed by giving preliminary approval to an exemption from state sales and use taxes of $905,000.
“With our investment in BioMed Realty, and elsewhere across our businesses, life sciences is among our highest priority investment sectors,” Nadeem Meghji, senior managing director, head of Real Estate Americas at Blackstone. “We look forward to continuing to support the growing demand for research and innovation.”