Design Insight: If you build it, will they come?

― Design Insight

If you build it, will they come?

A look at commercial developments for the science market

Innolabs, NYC Repositioning of an existing office building for lab use.

135,000 square foot gut renovation / 91,000 new overbuild for 226,000 total.

Client: King Street Properties, GFP Real Estate.

One of the first purpose built lab buildings for early R&D market NYC. Scheduled completion: Summer 2021

― Design Insight

If you build it, will they come?

T

he Wall Street Journal

attract lab tenants and might not provide the

ran the following

historically high returns one expects.

headline in July: “Biotech Properties Draw Billions of Dollars as Other Real Estate

Languishes”. For those of us already engaged in the commercial life science market, this headline comes as no surprise. We receive calls regularly from developers, brokers, project managers and even capital investors seeking information about biotechnology and inquiring about the potential to convert

And this is the crux of the issue: the needs of lab tenants are not the same as those of office tenants. Design has a direct impact on lab functionality and efficiency, the speed with which drugs can be developed and brought to market, the competitive appeal to talent, health, safety and cost. Just because you call a commercial building “lab-ready”, will tenants flock to it? If you build it, will they come?

properties, or build new buildings, to cash

To answer this question we rely on our

in on high investment returns, low vacancies

understanding of biotech tenants, earned

and solid credit expressed by minimal rent

through one of the largest portfolios of

defaults during COVID-19.

commercial lab design in the industry.

However, enthusiasm for this market has not always been so strong. As recently as five years ago, there were under a dozen dedicated developers of speculative lab/ office buildings for the life sciences in greater Boston/Cambridge (one of the global centers of biotechnology with an inventory

This gives us the ability to recognize the differences from academic labs and the expectations of likely tenants. Our insights also spring from one of the largest portfolios of commercial lab-ready “spec” buildings – giving us the ability to understand that drivers that can make sense economically.

of 17.1 million sf of rentable commercial lab

Finally, our understanding is informed by our

space), and only one major player in the

robust roster of master planning, design and

NYC market. Today interest has climbed

consulting for the development of science

dramatically, leading to a glut of developers

parks and districts, giving us insight into the

and related professionals who are unfamiliar

larger ecosystems and communities that

with the development and operation of

are needed to support successful biotech

commercial labs, increasing the risk of lab

developments.

building designs that do not work well or

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Design Key insights that impact commercial buildings and developments intended for lab use:

― 01

Planning nj Science operates within the context of an ecosystem that includes universities, other R&D companies, vendors, consultants, attorneys, venture capitalists, leadership and more. These parties impact development location viability as well as program. nj The target type(s) and maturity of science tenants, from incubator to biopharma, will influence planning and design of the core/shells as well as the tenant space designs. nj The growth pattern for biotech companies is dramatically different than for office tenants, impacting associated leasing strategies and floor plates to accommodate tenant expansions.

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nj The cost of lab space is extraordinary, so strategies to support both flexibility and multi-generational lab space will have real value to developers as well as tenants. Note that the cost of expensive Tenant Improvements (TI ) falls primarily back on the developer, through allowances, so smart design solutions and planning strategies will impact financial returns. nj Building maintenance and operations are entirely different when lab spaces are involved. Unsavvy developers will risk not only their own investment but also the marketability of their projects if they are not addressing specific operational and programmatic needs that do not appear in standard office buildings.

― Design Insight

If you build it, will they come?

― 02

Infrastructure nj Lab planning modules are based on the centerline spacing of lab benches, nominally 11’-0” (subject to some variations). Column grids that are multiples of 11 feet will be most efficient – and efficiency matters to tenants given the cost of lab space. nj While we have done modern labs in spaces as tight as 11’-4” floorto-floor, 14 or 15-foot clearances are required to economically and flexibly accommodate mechanical and duct space. nj Vertical shaft space for air, exhaust, waste, etc. must be

Structural vibrations can impact delicate scientific equipment and must be taken into account during facility assessment and design.

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accommodated. Unlike typical office BOMA calculations, lab-dedicated mechanical and shaft space are typically included in rentable areas. nj Rooftop and penthouse space demands are dramatically larger for lab buildings than for office buildings. More back-of-house and lower level space is required for lab than for office buildings. nj Structural vibrations can impact delicate scientific equipment and must be taken into account during facility assessment and design.

↑ HiberCell, Hudson Research Center, NYC

― 03

Transparency and a hi-tech open workplace are important features of lab design to attract top talent - especially to start-ups.

Safety nj Biosafety levels impact health, and proper planning to address lab safety can impact core and shell design through layouts, planning, codes and other factors. nj Chemistry, a part of virtually all life science programs, is closely regulated through building codes. Depending on which code your state or city follows, allowable quantities reduce dramatically by floor above grade – impacting the use of the first 3 floors of a building. Parking podiums can directly reduce leasing value, and the ratings of the core/shell construction elements can also impact lab functionality.

Chemistry, a part of virtually all life science programs, is closely regulated through building codes.

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― Design Insight

If you build it, will they come?

― 04

― 05

Lab Typologies and Design

Amenities nj Lab clients are savvy professional tech workers and they want the same amenities that any hi-tech company would want, but they also look for science amenities – from glass wash and freezer storage to high-bay

nj Having worked closely with scores of science companies, we recognize differences in the way they approach and manage their research and development. These differences are expressed through a variety of design typologies that include lab-centric, office-centric, parallel, offset and hybrid.

and vivarium facilities. Our developer clients often look to us to generate and recommend amenity programming and space needs that will appeal to the lab market.

nj Anticipating such fundamentally different approaches to the organization of tenant operational structures can yield more effective and functional buildings.

Core location and design, shaft/ MEP distribution strategies, window profiles, multi-tenant potential per floor, tenant expansion strategies and basic functionality are all co-dependent. It is critical to test-fit various lab/office layouts as a part of the conceptual design process for the commercial lab-ready building. This can ultimately influence the viability of converting a building into lab use, as well as the appeal of the building in the market.

→ Takeda, Cambridge, Massachusetts This “ballroom” style lab provides optimum value to this mature R&D company through flexible infrastructure, transparency, and a “Lab Centric” planning model.

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XMBLY, Somerville, MA New 1.25msf master plan for a lab/office development outside of Boston.

Offers potential of a consolidated campus for a single tenant—a market void in Boston at the moment.

Approved by the City, we are about to start Schematic Design for Phase One at 400,000 square feet plus structured parking, retail and a fire station.

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Looking Ahead

About the Practice Perkins&Will reflects the diverse sets of expertise, talent and perspectives that are required to successfully meet the needs of the commercial science

C

market—for R&D organizations, for developers, for communities and for the many associated individuals and organizations that compose the science ecosystem.

ommercial labs straddle

Our staff includes research scientists, lab

multiple practice areas:

planners, urban designers, architects,

Science and Technology,

interior designers and technical

Workplace/Corporate

specialists. Our areas of practice

Interiors, Commercial,

include both commercial development

Healthcare and Planning

and science, as well as healthcare,

and Strategies. Further, science is evolving

education, workplace, hospitality and

to be more “convergent”, a term originally

strategic planning—all required to create successful development projects.

coined by MIT to express the connection of the biological life sciences and engineering.

An understanding of this convergence and its impact on science tenants will be critical for the successful developer of lab space, as it will influence the viability and functionality of buildings and spaces for commercial lab tenants for years to come.

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Let’s continue the conversation. scienceandtechnology@perkinswill.com