by Brent Zeigler
Owners of commercial buildings in city centers everywhere are scrambling to adapt to the reality of a post-Covid world. With many large companies adopting hybrid-remote work models and right-sizing their workplace footprint, commercial leases are shrinking in size. Conversely, savvy owners and managers looking to lease up are turning their gaze toward the booming biomedical research and life sciences sector, recognizing that it is composed of tenants with specialized needs who will pay a premium for facilities that support their workflow and operations.
With corporate and institutional life sciences research expanding in cities like Boston, New York, and Atlanta, many building owners and investors are actively updating many assets in their portfolios to take advantage of this growth trend. While some are looking at converting whole floors and buildings to such new uses as affordable housing, many are finding that the research boom represents a more immediate opportunity, especially with the growth of these industries showing no sign of slowing down.
In Boston, for example, the bulk of large-scale lease agreements over the last year were inked by biopharmaceutical conglomerates. CRISPR Therapeutics has taken occupancy of a 260,000sf Downtown space, for one, as Bristol Meyers Squibb now holds a lease on 360,000sf in Cambridge.
To attract these kinds of high-value tenant firms for long-term leases, many of these owners are consulting with experts to determine the most strategic investments in the hope of positioning themselves for a stable future with low vacancy rates and high returns. At Boston- and Atlanta-based architecture and interiors firm Dyer Brown, our dedicated Asset Design + Support studio, developed to assist landlords with boosting leasing and maximizing property values, is fielding many requests of this kind. But because the needs of the biotech and life-sciences company are decidedly different from those of the typical Class A tenant firm, renovation costs figure significantly into the equation.
Happily, the infrastructure of many Class A office properties can be upgraded quickly and cost-effectively with the infrastructure required for non-specialized, flexible research science. We are regularly engaging with owner groups and their management teams to discuss cost-effective strategies for infrastructure upgrades that will help them to capitalize on the growth trends in these areas.
Typical laboratories require electric, water, and gas for the “wet benches” placed across the active research floor area. Allowances for flexibility include the use of “plug and play” connectivity for these utilities, making it possible for benches and casework to be quickly and easily rearranged as research modes change. Another major consideration is ventilation, which must be robust enough to meet minimum requirements for air exchange to safeguard the health of researchers. Some types of research require hooded vents over the benches, creating some additional challenges.
For owners and investors who may already have been considering renovating assets, our investigations on behalf of our clients show that the added costs for life science-focused upgrades are modest, and have the added benefit of the promise of significantly higher per-square-foot value. Meanwhile, it is uncertain whether the market for conventional office leasing will return to its pre-Covid condition. Since the life sciences sector shows no sign of slowing, our firm and others like it expect to be working for some time to come on adapting large, well-located commercial facilities for research tenants.
Brent Zeigler
Brent Zeigler, AIA, IIDA, is president at Dyer Brown Architects.
