Bank OZK Grants IQHQ Six-Week Extension on $915M RaDD Loan

Bank OZK has granted IQHQ a roughly six-week extension on a $915 million construction loan for the Research and Development District (RaDD) life sciences project. The extension was signed after the original loan matured, highlighting ongoing financial distress for the massive, vacant San Diego development.

Timing and terms of the modification

The loan modification was signed by Bank OZK on September 30, 2026, and by IQHQ the following day. It was filed with San Diego County on October 2 as the 'Fifth Modification of Construction Leasehold Deed of Trust.' The agreement, made effective as of the original maturity date of August 26, 2026, sets a new final deadline of October 9, 2026.

Project remains unleased since completion

The RaDD project is a 1.7 million square foot life sciences complex in downtown San Diego. Construction began in 2021 and was completed in 2024. Upon completion, the project had no tenants in place. IQHQ has since struggled to fill the vast space with life sciences occupants, a core challenge underlying the loan's distress.

Lender and investor reaction

Analysts at Citi described the brief extension as a short-term forbearance period and not a long-term solution. They suggested it looked like a last-ditch effort to avoid default, noting that Bank OZK and IQHQ likely failed to agree on a comprehensive restructuring before the loan matured. Citi said the short timeline shows the severity of the project's financial distress, given its limited occupancy.

The project's struggles have impacted investors. In the second half of 2025, six registered funds with a combined $707 million allocated to IQHQ had their positions marked down. The RaDD project has dragged down these investors.

Bank OZK's stock price fell following the disclosure. Shares were down more than 5% after Citi's note and hit an intraday low of $45.06, the lowest level since March. During afternoon trading on Tuesday, shares were down 2.48% to $45.44. Citi expressed a cautious view on the modification, noting the project's fate likely hinges on negotiations before the October 9 deadline or another extension will be needed.

What Bank OZK says next

Bank OZK executives have been negotiating a longer-term solution. On the firm's second-quarter earnings call in July, President Brannon Hamblen said the bank was engaged in conversations with IQHQ and a mezzanine lender about a multiyear extension and recapitalization of the project. Terms had not been fully developed at that time.

Hamblen indicated more details would be forthcoming. "Can't really say more about it now, hopefully in around 92 days, we'll have more to report," he said. The bank is scheduled to provide an update on the loan and the RaDD project during its third-quarter earnings call on October 21, 2026.