On October 23, 2023, JLL Capital Markets announced they have arranged financing for the redevelopment of Pegasus Park's Bridge Labs. The two-story life sciences/lab facility, located within the Pegasus Park campus across I-35 from the UT Southwestern Medical Center, will be expanded and converted into a "state-of-the-art lab/R&D facility". JLL arranged the financing on behalf of Montgomery Street Partners, J. Small Investments, and an affiliate of Lyda Hill Philanthropies. The financing package includes a five-year construction loan via InterBank and a C-PACE loan via Nuveen Green Capital.
The project will be the first life sciences development or conversion in the DFW market, which has gotten parties interested for both financial and moral reasons. Given The Metroplex's leading research universities, such as UT Southwestern and SMU (both of whom are already "academic anchors" at Pegasus Park), it is remarkable this is the first such development. Due to this unfilled niche, the redevelopment is already 30% pre-leased.
The timing couldn't be better, either, since the Advanced Research Projects Agency for Health (ARPA-H) announced an initiative "ARPANET-H". While perhaps not as groundbreaking as the original ARPANET, the $2.5bn initiative is a huge vote of confidence toward The Metroplex as a life-sciences hot-spot. Pegasus Park will serve as one of the three hubs in the network, serving as the "Customer Experience Hub". The other hubs will be located in Cambridge, Massachusetts and Washington, DC. As an SMU graduate, I must say I didn't expect Dallas to be in the same conversation as Cambridge, but here we are.
Where most developers would find difficulty obtaining financing in this market, InterBank was more than happy to finance this project. C.K. Lee, InterBank's President and COO, spoke to the importance of the deal:
This groundbreaking initiative was an opportunity to leverage our bank’s support for a critical community and national priority. The work done here will have tremendous impact, and we are proud Interbank could play a role.
Sean Ribble, Senior Director of Originations at Nuveen Green, spoke similarly:
Having grown up in Dallas, it is very exciting to be a part of the Pegasus Park project, given its rich history. It is an honor for Nuveen Green Capital to help finance this first-of-its-kind life sciences development project for the city where we were able to help complete the capital stack with C-PACE’s long-term, fixed-rate, low-cost capital.
The buildout, which is scheduled to be completed in Q3 of 2024, will include pre-built lab spec suites and centralized lab services/amenities across two floors. Additionally, tenants will enjoy the amenities present on the greater Pegasus Park campus, such as:
- Brewery with restaurant & taproom
- On-site conference center
- Grab-and-go dining options
- Fitness center
- Outdoor firepits
- Indoor/outdoor lounge
Important projects such as these give investors an opportunity to disconnect themselves from the cyclical nature of real estate, something very relevant in this market. Unlike other asset classes, niche yet crucial facilities such as biotech labs are resilient in the face of uncertainty.