Sterling Bay Leases Half Its New Life Sciences Center And Has Its Eyes On The Future
Sterling Bay has leased about half the space in its recently redeveloped, 125K SF medical research lab at 2430 North Halsted St. in Chicago’s Lincoln Park neighborhood. Its life sciences division, The Labs, signed a 4K SF lease with Vanqua Bio, a biotechnology startup focused on the research and development of novel therapies for neurological disorders.
Historically, Chicago frequently lost life sciences startups to markets such as Cambridge, Massachusetts’ Kendall Square or San Francisco’s Mission Bay, due to a lack of adequate lab space, especially for young firms that secure venture capital and are ready for rapid growth.
“We’re trying to bridge the gaps in the market,” Sterling Bay Director of Life Sciences Catherine Vorwald said.
“Life sciences firms need wet labs, and that’s very expensive to build,” she added.
Such wet labs, meaning laboratories dedicated to biology and chemistry research, ones that may handle hazardous substances, can cost up to $500 per SF to develop, so it’s no surprise Chicago has so little, according to CBRE Executive Vice President David Saad, who represented Sterling Bay in this latest transaction.
“It’s not for the faint of heart,” he said.
The vacancy rate in the Chicago region’s life sciences sector, now encompassing about 5.4M SF, is 1.3%, according to Cushman & Wakefield’s Life Sciences 2020, The Future Is Here report. Developers in the much larger Boston market have about 4M SF under construction.
Sterling Bay sees its Lincoln Park outpost, referred to as “2430,” as just one part of a future life sciences ecosystem. Its first building at Lincoln Yards, the 55-acre, $5B complex that will rise a mile or so to the southwest, will be a 300K SF building dedicated to life sciences, and Vorwald and Saad said it would give growing firms someplace to go.
“If they do get funding, they won’t necessarily have to go to one of the coasts,” Saad said. “The significance of 2430 is it will act as our engine. Once you get the companies here, and they can scale and grow here, it will help develop a life sciences cluster.”
Vanqua Bio was started in 2019 based on research conducted by co-founder Dr. Dimitri Krainc, professor and chairman of Davee Department of Neurology at Feinberg School of Medicine, Northwestern University. It plans to move into its new space in January.
Gensler has nearly finalized the design for the Lincoln Yards building, which Sterling Bay is actively leasing, Vorwald said. She envisions it as more than a lab building. It will feature gathering spaces along the Chicago River, areas that tenants can use to exchange ideas and build a true scientific community.
“There companies have to see a future, and that their future is at Lincoln Yards,” Vorwald said.
Saad added that other startups seem likely to join Vanqua Bio at the 2430 building.
“We have another user in our back pocket that we’re close to getting done.”