How lab space shortage is encouraging life sciences firms to get creative
With a shortage of suitable facilities to meet the specialized needs and labor requirements of U.S. life sciences companies, coupled with rapidly rising rents across established U.S. life science clusters, many in the market are facing testing times.
Working toward finding a cure for some of the world’s most crippling diseases is challenging enough in the right lab environment.
Yet with a shortage of suitable facilities to meet the specialized needs and labor requirements of U.S. life sciences companies, coupled with rapidly rising rents across established U.S. life science clusters, many in the market are facing testing times. Their solution? A bit of creative thinking to ensure their scientists and staff make the most of the space they can secure.
“Expensive and competitive real estate markets are forcing life sciences companies to explore creative real estate options to drive innovation and productivity in their workforce,” observes Roger Humphrey, Executive Managing Director and leader of JLL’s Life Sciences group. “In the most sought-after life sciences hubs, fierce competition for space and talent is leading to the development and renovation of new space, both where you might expect it and in surprising locations where adaptive re-use conversions result in energizing new space.”
Rents rose by nearly 52 percent year-on-year in San Francisco’s North County, for example, and are as high as $70.12 per square foot in Boston’s East Cambridge submarket. In even lesser life sciences markets, such as Philadelphia, Denver and Seattle, rents ascended 16 percent, 11 percent and 10 percent respectively.
In pursuit of lower costs for high-quality, specialized space, some companies are expanding just outside premium locations to retain access to a high-value talent pool and resources while avoiding premium rents. In the Boston suburb of Lexington, for example, the first suburban speculative laboratory facility is under development. Similarly, San Francisco is seeing development in Mid-Peninsula, where 200,000 square feet of office space is being converted to labs
Getting the right people is critical for life sciences innovation. As such, talent recruitment and retention are major factors in site selection. In order to access talented scientists, many life sciences companies are seeking reasonably priced facilities that are not only relatively close to leading research centers, but will also enhance employee engagement and retention due to accessibility.
When new development is not an option, some companies are undertaking creative renovations of outdated facilities and converting low-rise office-flex buildings into innovation-friendly laboratory facilities.
“Adaptive re-use strategies create opportunities for companies to gain proximity to life sciences talent and resources with facilities that support talent recruitment and retention strategies,” notes Humphrey. “Innovation is possible only with the right scientists and the right creative business minds at the table. For this reason, the life sciences sector is intensely focused on attracting and retaining top talent.
“We are seeing companies build workplaces that influence the health and well-being of employees through fitness centers, day care centers and other onsite well-being amenities, and provide plentiful natural daylight and inspiring spaces to work,” he adds.
In Cambridge, Boston’s life sciences epicenter, Blackstone is converting a 90,000-square-foot office facility into lab space that is rapidly being leased. Facing a serious shortage of multi-tenant life sciences facilities, biotech companies in Los Angeles County are adapting low-rise office-flex buildings into affordable multi-use facilities with spacious floor plates, loading capabilities, high ceilings and high-volume ventilation.
With open, flexible floor plans becoming standard, life sciences companies are turning toward amenities and finding space that improves the well-being and productivity of employees. Gone are the claustrophobic laboratories of the past, as life sciences companies seek modern facility designs with more natural light, open spaces and different types of workspaces.
For example, The Cove in San Francisco is currently the largest life sciences development underway in the United States. A seven-building, one-million-square-foot campus, The Cove will feature a full-service amenities center with fitness and exercise rooms, a bowling alley, bocce ball courts, a café, an amphitheater and hotel space.
On the opposite coast, the Alexandria Center at Kendall Square (ACKS) is under development in Boston. Bluebird bio will occupy the laboratory portion of the campus’ 500,000 square feet of office and laboratory space at 50-60 Binney St., while Bristol-Myers Squibb will be the anchor of the 430,000-square-foot 100 Binney St. facilities. Located in East Cambridge, ACKS includes more than 10 hotels, 50 restaurants, 150 shops, and four Cambridge Athletic Club fitness centers within a one-mile radius.
“Innovation is possible only with the right scientists and business minds at the table, which is why the life sciences sector is intensely focused on attracting and retaining top talent,” says Humphrey. “From coast to coast, we are seeing companies build workplaces that intentionally influence the health and well-being of employees.”
Today’s life science companies have many difficult tasks facing them. Finding the right workspace to get on with the job at hand will allow them focus on solving other challenges.