What are the roads to returns in life sciences?

Essential design elements for building future-proof life science assets

Levit Green - Houston, TX
Caption Levit Green - Houston, TX

What’s the Point?

Demand for life science space is on an upward trajectory. It may seem the road to returns would lean toward repurposing existing office or retail property to meet the need. However, unless the developer optimizes the space with two fundamental criteria — structural specifications and the balance of lab and office space — it will be difficult to compete with purpose-built lab space.

To Repurpose or Build?

The first life sciences design lesson to heed is to know thy occupant. Each life science company has particular technical and office requirements that cannot typically be easily retrofitted into existing properties. For example, some life sciences companies are adding on-site manufacturing to facilities as new methods to develop targeted cellular and gene therapies to enable different modalities of manufacturing drugs. While most tenants do not have this requirement, companies with highly bespoke therapies, such as those focused on gene therapy, often require near or on-site manufacturing. The rent premium of situating this capability in a prime location can be justified by the reduction in time to deliver the therapy and a significant decrease in transportation costs.

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Meeting the direct needs of each life science occupant is critical, and that’s not always feasible without new construction. Why? Most alternative commercial properties were not constructed to become a lab space that features product-specific requirements, including redundant emergency power systems, higher floor-to-floor heights, higher floor load capacity, sufficient vibration capacity, superior HVAC systems, and planned vertical MEP expansion.

Life science tenants frequently require the use of heavy high-tech equipment. Their lab space should have the ability to accommodate a live load of at least 100 lbs. per SF. Additionally, critical experiments can be impacted by vibration, which can negate results. Given the importance of accuracy, the presence of unwanted vibration can make a building nonfunctional for certain tenants’ needs. To offset operational risk, it is necessary to invest in enhanced structural vibration attenuation throughout the building.

Due to the potentially hazardous chemicals that life science tenants use, superior HVAC systems are required to prevent the recirculation of corrosive and toxic substances or the introduction of these substances into a fresh air room1. An occupied laboratory typically operates at rates of greater than eight room air changes per hour. Caution is needed when assets fit with HVAC systems that utilize recirculated air in which the asset may require a complete retrofit of the HVAC system to meet minimum standards.

With these considerations ESG is also top of mind for developers, investors, and occupiers alike. Especially given the heightened energy demand for these assets. Building highly efficient assets that source from sustainable energy sources, as well as considering embodied and operational carbon emissions should be key in competing for the most sought-after tenants.

The second part of the design equation is the balance of lab and office space. Each tenant has different needs and those needs can be more complex as the company evolves. Therefore, lab space must be flexible and modular. Balance allows the tenant to use the space more efficiently and therefore the likelihood increases that the tenant will make a long-term commitment to an asset. A major pharmaceutical tenant headquartered out of London2 substantiated the search for agility: “We want design spaces where people can share pieces of instrumentation, and the flow between different types of uses is integrated. How can we ensure space is flexible and adaptive is on our minds right now.”

The road to return in life sciences requires careful consideration of each occupant's specific needs, as retrofitting existing properties to meet these requirements can often be challenging or impossible. New construction offers the flexibility and modularity necessary to meet the evolving needs of life science tenants. Superior HVAC systems, enhanced structural vibration attenuation, and sustainable energy sources are just a few examples of the critical components that must be incorporated into life science properties to ensure success. With a people-first approach that prioritizes occupant needs, the life sciences industry can continue to push the boundaries of innovation and make meaningful progress towards a more sustainable future.

Learn more about designing purpose-built life science spaces

1 American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), “Designing, Operating Safe HVAC Systems for Hazardous Spaces,” August 2021.

2 Hines-led interview with London-based occupier at a major pharmaceutical company; conducted in Q2 2021.