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The Stakes Are High in the Life Sciences Location Game

Savvy leadership will recognize current trends and options and carefully analyze established criteria when making the company's next location decision.

James Cahill, Managing Director, Jones Lang LaSalle (Biotech Location Guide 2009)
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Site Location Criteria
Real estate decisions for life sciences companies are decidedly more complex than those made by most traditional corporate entities. In addition to the traditional decision-making criteria that most companies use, your life sciences company should incorporate the following major factors when choosing a location:
n A highly skilled scientific labor force: Does the jurisdiction have the necessary educated labor at competitive compensation levels to fulfill the needs of the company today and in the future? It should be noted that these types of employees are typically found in and around hubs of world-class academic and research institutions and within close proximity to biopharmaceutical supplier networks.

Favorable state/local tax treatment and a friendly regulatory environment: Do the local and state governments understand the operational needs and critical "time is of the essence" requirements of life sciences companies and are they able to assist your life sciences company with permitting and regulatory approvals? Life sciences real estate decision-makers need to know if a location's regulatory climate and permitting process is clear, easy, and timely.

Utility service and costs: Are the area utilities reliable and sufficient for operational needs and are the costs competitive? Given the high utility demands of biotechnology and pharmaceutical companies, utility costs should be thoroughly analyzed in order to determine how expensive one location would be over other similar short-listed sites.


The existence of a critical mass of affordable existing life sciences facilities: Is there a critical mass of readily available and equipped lab facilities that can be retrofitted vs. having to design, build, and finance new laboratory construction? It is not uncommon for laboratory/biopharmaceutical manufacturing facilities to cost $100 to $1,000 per square foot to build out; with capital being constrained today, retrofitting existing functional facilities may be preferred over having to build from a shell condition.

The current state of the economy has caused companies all across the world to take creative measures to cut costs, and life sciences firms are certainly no different. Even as more and more states create initiatives to lure your life sciences firm and its highly educated and well-compensated work force to their communities, financial objectives must be met. Failing to recognize the current economic pressures and your unique real estate site location criteria upfront can create challenges down the line, both economically and scientifically. By keeping these specialized characteristics and trends in mind when making your next location decision, your company will effectively mitigate against some of the larger challenges that can occur.


James V. Cahill is a managing director at Jones Lang LaSalle. He focuses on assisting life sciences companies with the identification of and negotiation for office, laboratory, and biopharmaceutical manufacturing facilities. He can be reached at (301) 214-1144 or James.Cahill@am.jll.com.

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