Construction will begin this week on the first phase of Harvard’s Enterprise Research Campus, a long-planned mixed-use development in Allston across Western Avenue from Harvard Business School.
Developer Tishman Speyer has landed $750 million in construction financing, a deal led by Otera Capital — an arm of Canadian pension fund manager CDPQ — in what the real estate firm says is the largest such package reported in the United States so far this year. Large-scale commercial real estate financing has been particularly difficult to land of late as lenders have pulled back amid broad global economic uncertainty and interest rate hikes.
The Harvard Allston Land Co. selected Tishman Speyer as the developer for the ERC’s 900,000-square-foot first phase in late 2019. With construction financing in hand, Tishman pulled nearly $500 million in building permits on June 14 for three projects along Western Ave.: a 17-story apartment building with 343 units, along with four retail or restaurant spaces and a second-floor roof deck; 440,000 square feet of labs; and a 16-story, 250-room hotel. All the projects will have underground parking. The project will also have more than 2 acres of public open space.
As part of a deal brokered by city officials, one-quarter of the planned housing units will be affordable to those making between 30 percent and 100 percent of the area median income — ranging from $44,520 to $148,400 for a family of four. That’s substantially more than typical city requirements.
“With financing now in place, we are set to realize a collective vision for the ERC as an inclusive community driven by innovation and human connection,” said Tishman Speyer CEO Rob Speyer in a statement.
Tishman Speyer and Bellco Capital’s life-science joint venture development firm, Breakthrough Properties, will develop, lease, and operate 440,000 square feet of lab space across two buildings. The labs will be targeted toward biotechnology and pharmaceutical companies “across all life cycles,” from early-stage companies to large global firms who are seeking proximity to Harvard.
“The ERC will be the premier location for companies that are developing life changing technologies and want access to leading researchers and potential partners at Harvard University,” according to a press release.
Though Harvard has long been among Allston’s most dominant property owners, the ERC is among the institution’s first forays into large-scale private development in its nearly four-century history. It echoes what MIT has done a bit down the Charles River in Kendall Square, building office towers and lab space that house prominent companies including Boeing and Apple. MIT in early 2017 paid $750 million for development rights on a key 14-acre parcel in the neighborhood and is planning another large-scale project there.
Harvard has set aside some 36 acres for its ERC in Allston. The university also owns the Beacon Park Yard, a former CSX Transportation railyard that has long been heralded for its development potential. The Boston Planning and Development Agency board this week approved plans to hire a consultant to develop a “regional framework” for that Beacon Park Yard.
With the ERC, Harvard aims to “grow the life sciences research ecosystem around Harvard University,” said Carl Rodrigues, CEO of the Harvard Allston Land Co., in a statement. “This project will create new opportunities and places for students, faculty and our neighbors in Allston, and will complement the cutting-edge institutional research taking place on Harvard’s campus and throughout the region.”
Beyond the labs, apartments, and hotel, the ERC’s first phase will also include a conference facility made from engineered wood and named for private equity billionaire and philanthropist David Rubenstein.
Tishman committed to awarding more than 30 percent of its pre-construction deals and more than 15 percent of its total construction costs to minority and women-led firms. An early inclusive investor initiative, led by Tishman and the Harvard Allston Land Co., resulted in more than $30 million in equity from diverse individuals and households — including four NBA All-Stars.
Turner Construction Co., Janey Construction Management, and J&J Contractors will build the ERC’s labs, while Consigli Construction and Smoot Construction will build the apartments and hotel. Construction on the buildings is expected to wrap up in late 2025 and early 2026.