In recent years, record-breaking investment flowing into the life sciences sector has prompted unprecedented growth. As life sciences firms expand their facilities to keep up with demand, available space to accommodate these growing businesses — especially in well-known industry clusters like San Diego, Boston, and the San Francisco Bay Area — remains scarce.
Leasing space in traditional office buildings can provide a solution for life sciences companies with dry lab needs, as well as those involved in cell and gene therapies and R&D. For office landlords grappling with uncertainty as other industries embrace remote and hybrid work policies, the life sciences sector represents an untapped potential revenue stream.
Additionally, in regions with the talent pipeline to sustain a life sciences cluster, retrofitting existing offices to meet these companies’ needs presents an opportunity for economic development organizations (EDOs) and developers to attract new businesses in this booming sector — without making significant upfront investments in new construction.
It’s important for building owners and tenants alike to note that there’s more to adapting traditional office spaces to accommodate life sciences firms than simply bringing in lab benches and microscopes, and not every office building will be able to accommodate these companies’ needs. Here are the top three questions to explore when considering retrofitting office space for life sciences companies:
1. Which life sciences tenants can realistically operate in an office building?
Whether or not a particular life sciences tenant will be able to operate in an office building depends largely on the functions and activities that will be performed in the space.
For example, wet labs where scientists work with biological materials rely on specialized systems for air filtration, plumbing, waste disposal, life safety, and fire protection. These systems tend to require significant more retrofitting and development to meet strict standards. But a dry lab, where the focus is on material science or electrical engineering, may lend itself more readily to an existing office location, even if the space wasn’t originally designed for lab work. Dry labs will require more robust MEP systems than a typical office tenant, but such equipment is not as displacing as systems required for wet labs.
Leasing space in traditional office buildings can provide a solution for life sciences companies with dry lab needs, as well as those involved in cell and gene therapies and R&D.
In addition to accommodating specialized equipment and infrastructure, the amount of space needed is a key consideration for determining what kinds of life sciences tenants an office building could host. Companies that are at commercialization stages or are GMP regulated will need a lot more square footage, and they may need additional space considerations such as loading and dock stations.
Finally, building owners and companies need to consider the building’s other tenants, as well as any residential neighbors. Labs that expel chemical fumes via exhaust fans cannot be located adjacent to apartment buildings with outdoor space. And any facility where workers will be transporting hazardous materials in and out should have its own separate loading dock, a dedicated service elevator, and private storage areas. No office worker wants to share an elevator with someone in a hazmat suit carrying a cooler labeled “BIOHAZARD.”
2. What technical and facilities needs should office buildings be prepared to address?
While some life sciences companies may have similar needs to a traditional corporate office tenant, others will require certain structural features and specifications that may not already be included in the space. The first and perhaps most important is sufficient access to power: on average, life sciences tenants use seven times as much electricity as regular office tenants due to air conditioning, exhaust fans, electrical load systems, and other specialized equipment. On a similar note, owners must ensure that the building floors can support any heavy equipment the tenant will need to install.
Companies that are at commercialization stages or are GMP regulated will need a lot more square footage.
In offices that are being retrofitted to include lab space, it’s important to keep in mind that these facilities require more complex mechanical systems as well as more risers and shafts than one might find in a typical office building. Labs may also require systems for vibration monitoring, disposing of chemical waste, and a more extensive HVAC system to maintain a highly controlled environment. Landlords and tenants — as well as their design and engineering partners — will need to work collaboratively to assess what’s possible and how to make modifications as needed.
Lastly, landlords need to understand that these spaces may need to adhere to regulatory requirements and more stringent ESG (environmental, social, and governance) parameters depending on what the lab is researching or producing. Again, waste, water systems, and use of special gasses will need to be licensed appropriately if required.
3. What sort of space will be attractive to life sciences companies?
Each company’s wants and needs for its space will be unique, but building owners seeking to attract tenants in the life sciences industry should familiarize themselves with these businesses’ preferences and requirements — and, if necessary, renovate their spaces accordingly.
Broadly speaking, life sciences companies tend to value layouts with an open floor plan to facilitate collaboration and engagement. Comfortable break rooms that allow scientists and other staff to step away from their work and briefly recharge are also a popular feature. Depending on the type of equipment the tenants will need to install, it may also be necessary to make structural renovations, such as raising ceiling heights or building out the private loading docks and service elevators mentioned above.
These spaces may need to adhere to regulatory requirements and more stringent ESG parameters depending on what the lab is researching or producing.
Landlords also need to consider usability characteristics that are unique to modern lab settings and go beyond square footage. Ensuring access to key talent, services, and utilities will be a winning formula for landlords. For example, with life sciences tenants shifting to digital processes and investments in data-driven research, access and integration to IT systems is essential. The most desirable facilities for longer-term tenants will also be able to accommodate future advancements and growth as they move beyond the R&D stage and begin to commercialize products.
While the outlook for office space in many industries is uncertain given the shift to remote and hybrid work, the continuous discovery of new gene therapies, delivery technologies, and drugs in different molecules has led to a surge in demand for space within the booming life sciences sector.
As developers and EDOs explore ways to establish new life sciences clusters in their communities, there is a growing opportunity to retrofit office buildings to accommodate these businesses. By asking strategic questions and working with well-rounded partners who understand the engineering, workplace, and design needs of the life sciences industry, these stakeholders can work together to identify and create spaces that satisfy all parties’ needs.