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News release

CHICAGO, IL

Three Ways Healthcare Reform is Changing the Life Sciences Industry and its Real Estate in 2014

New corporate real estate strategies can help life sciences companies thrive this year


CHICAGO, Jan. 16, 2014 — Facing the full impact of healthcare reform initiatives in the United States and elsewhere, life sciences companies are tackling a dramatic new reality. The transition to value-based medicine is focusing attention on research productivity, while regulatory pressures are growing, requiring specialized facilities management expertise just as seasoned talent begins to retire. As life sciences companies continue their quest to maximize productivity and reduce operating costs, the corporate real estate and facilities management function has the potential to not only support shifting business priorities, but to also drive top-line value in three ways this year.

“Life sciences companies are finding that the real estate and facilities functions can be a source of operational value and productivity,” said Roger Humphrey, Executive Managing Director of Jones Lang LaSalle’s Life Sciences group. “Healthcare reform and the shifting life sciences industry landscape are driving companies to look to their real estate experts and outsourcing to increase efficiency and quality in their facilities operations.”  

  • Realigning the Facilities Portfolio for Shifting Business Models – The cost pressures that began with the patent cliff will be exacerbated as value-based product pricing becomes the new normal. Site selection is becoming even more critical, as companies seek vital access to multi-disciplinary research talent, new market opportunities and cost-effective production facilities both at home and abroad to support narrow profit windows. Mergers, acquisitions, business unit spin-offs and creative joint ventures further complicate the facilities picture, as the lag time between a business strategy and real estate alignment can be lengthy. As life sciences companies respond to shifting operational priorities, a nimble portfolio that offers the right facilities in the right places will drive value and productivity in 2014.
  • Outsourcing of Increasingly-Technical Services – Facilities and real estate outsourcing is increasing across the life sciences sector, with many middle-market companies entering into outsourced facility management contracts for the first time. This transition is being driven by outsourcing’s role in streamlining a corporation’s FTE count and boosting operational efficiency. Leading companies are beginning to offload management of their R&D laboratories, large manufacturing sites, biologics production facilities and other technical, specialized facilities to life science facilities management experts that understand sensitive environments.

    “Life sciences facilities management is extending ‘beyond the yellow line’ and into highly-regulated areas formerly off-limits to outsourcing service providers,” said George Wittman, P.E., Senior Vice President in Jones Lang LaSalle’s Life Sciences group. “The best-in-class outsourced services firms are being tasked not only with managing physical structures, but also handling quality control, equipment maintenance, technology, critical environment and other specialized functions in R&D laboratory and production facilities.”

    Environmental heath and safety (EHS), formerly the province of in-house staff, has become the purview of facilities services providers with the skills and technology platforms to support activities such as FDA reporting and documentation across multiple sites and hazardous materials management.
  • Shaping a High-Performance, Multi-Generational Workforce – The shift in workforce demographics will bring multiple generations together, furthering workplace trends already apparent in life sciences and other industries. In addition to increasing space utilization and reducing occupancy costs, forward-looking life sciences companies are finding opportunities to create dynamic workplaces that support collaboration and innovative thinking. Workplace strategy and change management programs can help life sciences companies drive increased employee engagement, innovation and productivity in this challenging environment.

    Demographic change is also affecting the facilities management function. An increased need for facilities management expertise in highly-sensitive life sciences office, R&D and production environments is coinciding with the nearing retirements of the most seasoned in-house facilities talent. For many, real estate outsourcing will be the fastest route to creating value through multi-generational facilities teams that can support the specialized demands of today’s life sciences companies.

Jones Lang LaSalle offers a team of real estate and facility management experts dedicated to helping life sciences companies optimize and manage their real estate portfolios. The firm provides a comprehensive range of facilities management services to the life sciences community covering 75 million square feet of research, manufacturing and commercial space. Its industry leading full-service platform includes: integrated facilities management, engineering and operations, energy and sustainability, transaction advisory services, lease administration, project management and a platform for comprehensive laboratory services, Labwell.

A leader in the real estate outsourcing field, Jones Lang LaSalle’s Corporate Solutions business helps corporations improve productivity in the cost, efficiency and performance of their national, regional or global real estate portfolios by creating outsourcing partnerships to manage and execute a range of corporate real estate services. This service delivery capability helps corporations improve business performance, particularly as companies turn to the outsourcing of their real estate activity as a way to manage expenses and enhance profitability.

For more news, videos and research resources on Jones Lang LaSalle, please visit the firm’s global media center Web page http://bit.ly/18P2tkv.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. For further information, visit www.jll.com.