Developer Takes A Chance On Science Park | BioRealty could develop as much as 720,000 square feet
Image/Courtesy
A rendering of the planned Grafton Science Park.
Image/Courtesy
A rendering of the planned Grafton Science Park.
All the industry sweet talk and government platitudes in the world can't cover up the fact that many life sciences companies don't have the money to complete, or even begin, real estate transactions.
And that's why JM Holdings Inc., a for-profit subsidiary of Tufts University, chose Irvine, Calif.-based BioRealty Inc. to develop the 100-acre, $245 million Grafton Science Park in Grafton.
Now, BioRealty and the university, which operates the adjacent Cummings School of Veterinary Medicine, have their eyes on developing as much as 702,000 square feet of research, manufacturing and office space for a variety of life sciences and medical-related companies there.
Included in the development is a 40,000-square-foot biosafety laboratory to be shared by park tenants. The lab is currently under construction and is expected to be complete next summer.
The site is off Route 30 and is bordered by state-owned land, the Cummings campus and land owned by CenTech Park, an office park developed by the Worcester Business Develop Corp. The site is 3.5 miles from the Massachusetts Turnpike and 6 miles west of Interstate 495.
Flexible Financing
A project this ambition certainly won't be easy. And Stan Wendzel, BioRealty's managing director, said it never is.
"A majority of companies in the bio-medical sector...are very early stage. They're still developing one or two products, they're still losing money," he said.
Bring that, along with dreams of a flashy new headquarters or laboratory building, to lenders, investors or potential equity partners, and all but the most intrepid may just laugh. "The companies probably couldn't get financing unless they did it on equity," Wendzel said.
But Wendzel said the investors that have relationships with BioRealty are a flexible bunch. BioRealty underwrites the real estate and the companies that occupy it. The company formulates lease financing arrangements with each individual tenant, and "we get good risk-adjusted returns, and we develop the land. We make a developer's income, as well."
Tufts leases Grafton Science Park land to JM Holdings and as individual parcels are developed and completed, JM leases them to the new tenants.
And Tufts is playing up the potential benefit to local coffers.
"We're one of very few not-for-profit entities that is putting parcels back onto the property tax rolls," said Tom Keppeler, a Cumming school spokesman. The state sold the Grafton Science Park site to Tufts for $1.
The arrangement is attractive enough that BioRealty is already in talks with what Wendzel called, "the first company to go into the park," a firm from outside Massachusetts that he wouldn't name. Wendzel said BioRealty has several development scenarios for Grafton Science Park. "It's not something that's going to happen overnight," he said. But the park could be fully developed in the next three to 10 years.
The site is adjacent to a commuter rail station serving Boston and minutes from Worcester. BioRealty is especially eager to point out the park's proximity to the Worcester Polytechnic Institute and the University of Massachusetts Medical School.
Keppeler said the university is hoping that BioRealty can offer potential tenants a level of stability they wouldn't get at other developments.
"They can sort-of work with a wider range of companies than some of your typical developers might be able to," Keppeler said. "They have a great deal of experience
developing lab space, and corporate space and science parks, so to speak."
The lab currently under construction at the site will specialize in research into food and water-borne illnesses and will be available for use by companies in the park, and other universities as well as private industry.
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