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One block east of Madison Square Park sits a 326,000-square-foot petri dish, where Deerfield Management, an equity investor in health care startups, is running a real estate experiment.
The hypothesis: whether a taxpayer-supported life sciences industry will fill 345 Park Avenue South with entrepreneurial tenants following a $137 million buildout of lab spaces in the building.
To finance its 2019 purchase of the 12-story building from Aby Rosen’s RFR Realty for $345 million, Deerfield used proceeds from CMBS loans and $112 million of equity, with a lift from LifeSci NYC — a de Blasio administration program that will invest $1 billion to help establish a life sciences industry in the city, which has long lagged behind hubs such as Boston, New Jersey, San Diego and the Bay Area.
Documents associated with the CMBS loan provide an inside look at the property’s finances.
The building was 46 percent occupied as of April, and Deerfield’s website shows 135,000 square feet available for rent between floors four and eight.
While Deerfield itself accounts for more than 80 percent of the occupied space, one of its tenants, Helaina, produces “nature-equivalent breast milk components” and another, ProTara Therapeutics, works on genetic therapies for cancer and rare diseases.
In August, Deerfield announced the opening of a $1.4 billion investment fund, having closed on $840 million in venture capital in 2020. Its business model relies on drawing health science innovation out of academic institutions and into the private sector.
Other life science buildings to trade pricey build outs for high rents include the Alexandria Center for Life Sciences complex at 430 East 29th Street, where tenants include global firms Bristol-Myers Squibb and Pfizer as well as newcomers Intra-Cellular Therapies and Petra Pharma Corporation; and Taconic and Silverstein’s Hudson Research Center at 619 West 54th Street.
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