Developers Aim To Meet Growing Demand For Lab Space In Baltimore
A throng of entrepreneurs, academics, developers and prominent life sciences players milled about two construction vehicles parked on a vacant, grass-covered lot at West Fayette Street and Martin Luther King Jr. Boulevard in West Baltimore Friday afternoon.
The crowd came to celebrate the start of construction on 4MLK, a project that has been in the works for nearly a decade and will eventually provide the local life sciences sector with badly needed wet lab space.
Baltimore's economic development officials have pushed in recent years to promote life sciences as the region's next big economic driver, bolstered by institutions like Johns Hopkins University and the University of Maryland.
The efforts have begun to bear fruit, but the region now has barely any available lab space to support growing companies. Wexford Science & Technology, the lead developer behind the 4MLK project, aims to change that.
“[4MLK] creates a thriving ecosystem that brings in entrepreneurial companies and corporate interests to all feed off of and expand and grow the research happening at the University of Maryland, Baltimore,” said Caroline Moore, a senior vice president at Wexford Science & Technology.
Baltimore has established itself as a growing life sciences market, but it is still dwarfed by clusters in Boston, San Francisco and nearby Montgomery County, Maryland.
A JLL report released last month grouped the D.C. and Baltimore areas together and ranked them as the No. 4 life sciences market in the country. But additional data JLL shared with Bisnow shows the D.C. Metro area, including Montgomery County, has 14.3M SF of life sciences space while Baltimore has 4M SF.
“We’ve developed different clusters within the mid-Atlantic which have pockets of growth, and Baltimore is one of those clusters on the rise,” said JLL Executive Managing Director Pete Briskman, co-head of the firm's mid-Atlantic life sciences practice.
Baltimore has advantages compared to established clusters, such as Boston, San Francisco and San Diego, as it tries to entice new investments. By comparison, Charm City offers lower costs and less existing development, and the region’s workforce ranks among the most educated in the nation.
The region’s talent pool is arguably Baltimore’s most significant advantage, and Baltimore ranks among the nation’s densest populations of workers with advanced degrees.
Even before life sciences firms consider real estate, they evaluate whether the region has the workforce they need, Briskman said.
“Labor will dictate geography,” he said.
But the emerging Baltimore life sciences industry is facing some headwinds.
The flow of venture capital to Baltimore firms has slowed. Through the first half of 2022, according to JLL, Baltimore firms raised $38M through 24 venture capital rounds. By comparison, local firms attracted $190M in 2018, $146M in 2019, $129M in 2020 and $268M in 2021.
The industry also needs to build more lab space to keep expanding tenants in Baltimore.
New lab space makes up about 7% of available commercial real estate nationwide, according to JLL, but in Baltimore it only represents 1% of inventory.
“One of the reasons companies leave Baltimore is the inventory for their space needs hasn’t existed in the past,” Briskman said.
The pipeline isn’t devoid of new space.
A conversion of City Garage will deliver 70K SF of fast lab space, and 6200 Seaforth St. is slated to produce 7K SF. Meanwhile, the East Baltimore Development Initiative is soliciting evidence of insurability as part of its plans to build a commercial lab at the Johns Hopkins medical campus.
But 4MLK, expected to cost $320M, is the most significant investment in recent Baltimore life sciences real estate projects.
When complete, the first phase of 4MLK will deliver 40K SF of flexible lab and office space combined with 16K SF of gathering and events areas. A second phase calls for an additional 250K SF building. Combined, the buildings are slated to add 160K SF of Class-A wet lab capacity to Baltimore’s inventory.
“Programs like this … are advancing [our] standing within our region, and we do believe there is a great opportunity to advance economic growth and inspire innovation,” said Nikos Pavlidis, vice president and general manager of molecular diagnostics and women’s health at BD Life Sciences, which signed on as a tenant at 4MLK.
Despite the need for lab space, Wexford's Moore said 4MLK means more to the industry than providing those facilities.
The building is intended to serve as a hub for the industry. That desire to bolster a community is reflected in the inclusion of communal areas, including an assembly hall, she said.
“They build friends and really strong networks with the university, then they stay, and that is what creates the next great companies that seed our city and create economic development,” she said.