The COVID-19 crisis is far from over, but commercial building owners around the US are thinking ahead to what labs and workplaces may look like in the years to come. More and more companies have adopted hybrid-remote workforces in order to limit the amount of people congregating in one space. Some companies have adopted smaller office spaces and cut back on their leases in response to the COVID pandemic.
However, according to architecture and interiors firm Dyer Brown, the biotech and life sciences sectors are among those taking a different approach. Building owners and investors are strategically investing in life sciences and biomedical research, taking advantage of recent growth trends. Cities such as Boston, New York, and Atlanta are seeing an expansion in scientific lab spaces and office facilities, and building owners have found an immediate opportunity for growth in those areas. Dyer Brown is based in Boston, where the firm says that most of large-scale lease agreements signed in 2020 were for biopharmaceutical corporations.
Brent Zeigler, AIA, IIDA, president of Dyer Brown, says that the recent need for these lab facilities is a combination of companies looking to replace outdated existing facilities, accommodate more modern research, and accommodate staff growth. “Growth in the healthcare and life sciences research sectors continues unabated, leading to greater competition. Occupying new space in urban neighborhoods not only supports growth, it can contribute to recruitment efforts aimed at attracting talented researchers,” says Zeigler.
Flexible research spaces
The COVID pandemic led to a lot of companies implementing work-from-home policies, which “created an opportunity for both landlords and life-science end-users,” says Zeigler. “As demand plummeted for Class-A office space in the professional services, financial services, and technology sectors, among others, there were two major effects: First, after escalating steadily for almost 10 years, rents plateaued and in some sub-markets decreased. Second, the investment community shifted their focus to industries that would weather the COVID crisis well. The result was an infusion of cash across the life sciences industry, fueling the demand for lab facilities.”
This uptick in biotech and life science facility expansion has resulted in a mix of custom facilities as well as facilities built without a specific occupant in mind. Both have their advantages and drawbacks, says Zeigler. “If a landlord is building new or converting a building without having a tenant already signed on, the capacity, configuration, and type of the infrastructure being integrated will be designed to accommodate and support as wide an array of research modes as possible. An advantage of this approach is that to a degree it future-proofs the building, allowing it to accommodate a new user type when one lease ends and another tenant moves in. The downside is there is often a greater upfront cost to build or convert. In cases where the tenant is already determined, the owner can build to suit their very specific requirements. This can potentially keep costs down upfront, but may not provide the flexibility to support the research activities of future tenants.”
Flexibility, Zeigler continues, is the key to a successful lab facility. “Flexibility within the lab environment is a balancing act, but it is achievable. We typically think of labs as having fixed casework benches and with integrated hard-piped connections. An alternative approach is to employ more lightweight, movable benches—potentially on casters or wheels, and with height-adjustable bench tops—and overhead plug-and-play connections for air, gas, electric, data, etc. This kind of arrangement may provide flexibility within the research area to support a change in the number of researchers as well as in the type of research activity.”
Attracting local talent
It can be challenging to establish or relocate a research facility or lab offices in an urbanized area such as Boston, where costs are high and space can be limited. However, the value in cities such as this lies in their proximity to world-class educational institutions, medical facilities, and established research communities. “As designers, we like to imagine how design strategies can bring research activity to premium real estate markets. But ultimately, the real value for biotech and life-science firms to set up shop in these areas is the war for talent. Consider a market like Boston: Why does a biotech or life-sciences company, whether established or a start-up, locate here?” says Zeigler. “At the top of the list of reasons is access to a large number of research institutions, and the research talent emerging from those institutions. Drilling down even further, why would a company looking for space here decide to locate in a pricey sub-market like Kendall Square, or the Boston Seaport Innovation District? Again, it’s all about access to talent. There is an ecosystem that has developed in these markets that fuels research and innovation, feeding and sustaining itself. That kind of access is tough for less mature clusters to compete with, even when they are more affordable.”
Building in a city with a high cost of living means that project teams need to be thorough and creative with their plans. “The quickest and cheapest strategy is to renovate older lab buildings with upgrades and new systems, but you’re probably not going to find an entire lab building that is sitting empty when the market is this hot,” says Zeigler. “The other two options both have their pros and cons. Building new is easier and more cost effective, but the timeline from land acquisition through design and construction to occupancy is probably two years at a minimum, and up to three or four years depending on the location. Retrofitting existing office buildings into lab facilities allows an owner to go-to-market quicker. The specifics of the building and what the systems and infrastructure require in upgrades can add up to a significant investment, but in this market it’s worth investigating, especially if the timeline is short enough that the return on investment starts coming in quickly.”