Q&A: Mid-tier life
through real estate
Game-changing strategies to fuel innovation and growth
Breakthroughs in research and drug therapies have the potential to improve human health around the world. With no shortage of consumer health concerns – let alone a pandemic like COVID-19 – there is a rising urgency for the life sciences industry to respond.
Mid-tier pharmaceutical and bio pharmaceutical companies — which, together with small companies, have been responsible for bringing 63 percent of new products to market since 20131 — are feeling the pressure like never before. Capital investment funding was at an all-time high prior to COVID-19, but with it comes increased expectations for more innovative discoveries and quicker times to market.
Being less stifled with bureaucracy than their larger counterparts, mid-tier companies may have a built-in advantage in their ability to respond quickly to market changes and opportunities. But with the growing demand for ever-faster discoveries and approvals and a new normal following COVID-19, now is the time for innovative thinking to leverage that strength even more.
Reimagine commercial real estate can lead to game-changing strategies. In this short question and answer (Q&A) session, we’ll identify areas where real estate can improve efficiencies, increase innovation, and positively impact success.
Q: The competition for talent in Life Sciences has been fierce. How can real estate strategies help mid-tier pharma companies?
A: The operating models of mid-tier pharma companies can be extremely appealing for scientists desiring more innovative environments where they can be part of pioneering discoveries and potentially share in the rewards. But that’s not enough to recruit the best scientists and technical talent.
Real estate can be an effective recruiting tool. The key is to create engaging environments where the most sought-after talent wants to come to work. Workspaces should be tailored to the needs of today’s workforce by including productivity-enhancing features such as next-gen labs, dynamic office space, collaborative zones, and shared conference rooms. Amenities like fitness centers, cafes serving healthy food, covered bike parking, and even shower facilities cater to employee well-being.
Thoughtfully designed workplaces that maximize employee engagement benefits are not only powerful in attracting and retaining talent, they’re also good for business. A recent Gallup survey shows that highly engaged business units have nearly double the odds of success.2
The impacts of COVID-19 reverberate through many industries and Life Sciences is no exception. Following a health emergency of this scale, many mid-tier companies can benefit from real estate technologies that provide rich environments for connection with talent regardless of the location. Telecommuting, workplace agility and continuity – go a long way to retain employees.
Q: With real estate costs at an all-time high and availability at an all-time low, what options are there?
A: Location is always an important consideration in real estate, and with life sciences it is even more critical. Due to the scarcity of talent, prime locations are dictated by where that talent lives. In Life Sciences, it is well known that the most coveted geographies are typically found near leading academic institutions and investment firms.
Today, the top four Life Sciences clusters in the U.S. are Boston, San Francisco, San Diego, and Raleigh-Durham.3 Soaring demand continues to increase prices in these markets, which can force price-sensitive mid-tier companies to get more creative with their options. Here are a few examples:
- Improving the success of recruitment, and, therefore, overall ROI of real estate investments in high-cost markets by differentiating with unique amenities.
- Exploring locations in surrounding suburbs, which can prove to be more economical without abandoning the urban appeal of the most desirable markets.
- Widening the location search to include up-and-coming markets, including Denver, Houston, and Minneapolis.4
Q: How can we make facilities more adaptable and flexible to help shorten speed to market?
A: Agile real estate strategies can greatly enhance the process of taking a drug from R&D to market. Spaces that can be reconfigured easily and enable the cost-effective build-out of research facilities strike the desired balance between changing lab schemas and the high-tech office space needed for data scientists.
Flexible space also fuels the quest for continuous scientific breakthroughs. The ability to turnover labs and configure multiple types of set-ups rapidly allows scientists to transition seamlessly through the research, discovery, and trial lifecycle.
Quality and safety standards, as well as best practices through a best-in-class facilities management program, are additionally important. They can alleviate any mis-steps or compliance issues that can arise from growth, thus keeping a therapy moving through the life cycle of real estate.
Q: How can mid-tier pharma companies navigate all these real estate choices while achieving goals?
A: While R&D spending is at an all-time high, so is the tremendous pressure to meet unforgiving deadlines. The ability to remain laser-focused on the core competencies needed to continually innovate and bring new products to market is dramatically improved when non-core services, such as real estate and facilities management, do not become a distraction.
Outsourcing the plethora of much needed corporate real estate management services — location and site analysis, lease negotiations, hiring facilities staff, designing and building up (or down) the space, managing amenities spaces, and overseeing infrastructure maintenance — brings dramatic efficiencies and enables mid-tier life sciences companies to remain focused on the mission-critical work of getting drugs to market faster. Without deep in-house knowledge and expertise in these areas, these tasks can slow down processes and quickly escalate costs.
A trusted real estate management partner can help mid-tier bio pharma organizations avoid costly mistakes and delays, provide best practices and playbooks, and can present substantial pricing discounts offered through their established supplier network. If the selected partner has expertise in life sciences and an understanding of industry regulations, it can even add further value by helping to mitigate risks and helping to ensure the facilities remain safe and compliant. Technology is a value-add in this equation, as well. Insights for telecommuting, workplace continuity and workplace agility can show up richly in real estate technology.
As an example, a Boston mid-tier biotechnology company had a vision to heighten innovation and advance their R&D. They realized real estate was a key driver in their growth to become a clinical manufacturing powerhouse, but knew they needed to change gears and focus on their core business. With the help of JLL mid-tier Life Sciences experts, this fast-growing company quickly leased, developed, and launched a management program for a new, innovative facility.
In summary, real estate has become far more than necessary overhead. It is a vital part of a company’s innovation and growth strategy. Learn how JLL can help mid-tier life sciences companies develop real estate strategies designed to fuel scientific breakthroughs.
1. JLL, “Big Pharma poised for disruption in 2019 while mid-tier companies double down on innovation,” January 2019
2. Gallup, “The Right Culture: Not Just About Employee Satisfaction,” April 2017
3. JLL, 2019 Life Sciences Outlook: Innovation is alive and well, 2019