6 considerations for finding life sciences manufacturing space
How can life sciences companies, investors and developers increase efficiency, scale and speed to market?
Solving the manufacturing equation
Breakthrough discoveries and unprecedented capital funding have heightened the dynamic nature of the life sciences industry. This surge of resources should fuel a new level of growth in research & development (R&D) and accelerate the demand for quality manufacturing space.
With additional trends like onshoring of manufacturing production, localized manufacturing and surging demand from emerging biotechnology and large pharmaceutical companies alike, there is intense interest from the life science and real estate industries in facilities that are suitable for these good manufacturing practice (GMP) requirements.
Notably, these companies all start out with a similar vision: an existing Class A, flex-style building in a strong life sciences market with a desirable talent pool and nearby amenities for employees. They typically begin with these features in mind:
- A modern, new facility
- Strong life science labor demographics
- Generous clear heights
- Ample utilities and backup power
- Proximity to a major international airport
Unfortunately, once the search is underway, life sciences companies quickly realize these buildings generally aren’t available (unless they’re very lucky like TCR2 was in Rockville, MD) and they need to pivot to building conversions and/or greenfield development sites. Iovance Biotherapeutics chose a greenfield site at the Philadelphia Navy Yard, for example, after a thorough evaluation of facilities and development sites across the country. Life science companies are also competing with the equally hot industrial market, increasing the demand for similar buildings.
Real estate investors and developers – along with the companies with GMP requirements themselves – are trying to solve for these requirements with creative ideas. This includes adaptive re-use of existing facilities, like a former ice-skating rink, a printing press facility, vacant malls and big box stores, along with larger greenfield development sites in key life science submarkets.
What unique characteristics are paramount in the search for manufacturing space? We’ve outlined six key indicators to take advantage of in your company’s search for quality, efficient space:
- Scalability. Biotechnology companies need a path for exponential growth, including the ability to scale quickly to allow for the biomanufacturing of more products and therapies utilizing different modalities. Considering the size of the facility, the adjacent land, as well as the number of employees that will occupy that space are key in accounting for scale.
- Ecosystem. Life sciences companies thrive off their surrounding environment and often choose proximity to peer companies and talent. Take Iovance in the Philadelphia Navy Yard, for example. The Navy Yard is renowned as a diverse ecosystem of companies that include large corporate offices, established and emerging companies with research and development and manufacturing facilities, educational institutions, and related capital ventures.
- Due diligence. With speed to market a major priority for life sciences companies, time is of the essence. There are examples in which prospects will immediately dismiss a site option because of due diligence or timing setbacks which may have been avoided for an otherwise ideal site. All open questions regarding items like zoning, permitting, flood zones and site concerns need to be addressed as early as possible. A knowledgeable, creative and expert real estate team can quickly and effectively pinpoint potential opportunities and challenges in finding and acquiring manufacturing space.
- Flexibility. Recent trends show that a typical therapy will need a minimum of 1,000 doses manufactured just through the trial process. Advancing life sciences companies prefer sites that offer zoning with multiple approved uses and the ability to conduct different operations onsite. This includes flexibility in GMP space like pivoting batch size, having close proximity to labs and R&D work, process development, and corporate office operations. Life sciences companies are increasingly interested in focusing their small-batch manufacturing plants near existing research facilities to ensure supply chain integrity; this positions top R&D hubs across the country to capture outsized demand for pre-clinical manufacturing.
- Path to ownership. Life sciences companies gravitate toward real estate options that offer a path to ownership. These organizations invest significant capital into specialized R&D and GMP facilities, equipment and processes. The highly regulatory and mission critical nature of the science/manufacturing housed in these sites is another reason it would behoove life sciences companies to consider path to ownership.
- Incentives. Life sciences companies – especially pre-revenue companies – often rely on Landlord concessions (free rent and generous Tenant Improvement Allowances) and local and state incentives to stimulate a high-level of research investment.
To learn more about these considerations or discover additional factors that improve your search for life sciences space, download our Life Sciences Emerging Markets Index or reach out to us to learn about what’s happening in the Philadelphia market.