Lincoln Property Co. Planning Rare Spec Lab Space Near Denver
A building planned by Lincoln Property Co. in Broomfield will be a rare speculative property aimed at tenants in the growing life sciences industry in metro Denver and is likely to see plenty of demand when it delivers.
Lincoln Property this week announced its intent to construct a 450K SF development called Colorado Research Exchange, or CoRE, as a rare speculative laboratory space in metro Denver.
“We felt like there was a supply and demand story up there and haven’t seen anyone willing to go build the space, even though the demand is there,” Lincoln Property Senior Vice President Scott Caldwell told Bisnow.
The supply and demand imbalance for laboratory space in the northwest corridor and across the Denver metro is clear to anyone trying to help a life sciences company select a space in the area, the number of which is growing.
Economic development officials in the area are keen on bringing more life sciences companies to metro Denver, and the companies themselves would like to oblige, seeking new talent pools and lower prices than they find on the coasts.
Demand for life sciences space in the area is roughly 1.4M SF, according to a release from Lincoln Property and its project partner, FCP, a privately held development company. That’s more than 20% of the current total lab inventory of about 5M SF, according to data from Cushman & Wakefield.
CoRE will include four buildings, one of which will serve as an amenity center for tenants in the development. The three leasable buildings will range from 110K SF to 200K SF and will accommodate labs, research and development and light manufacturing uses.
As it stands, most companies looking to enter the Denver market must either build their own lab space or retrofit an existing building. The presence of speculative space offers some runway for companies that want to locate here but don’t have the time or capital to invest upfront.
“Our purpose-built campus will include tenant spaces designed specifically to accommodate lab/life sciences or tech uses,” Caldwell said in the release. “Companies won’t need to rehabilitate or convert old office or industrial space; these facilities will be on the cutting edge of critical environments for a broad range of uses.”
Although the boom in life sciences in metro Denver has accelerated in recent months — particularly with the announcement that a Blackstone affiliate purchased $600M worth of property with plans to renovate it into modern lab space — Lincoln Property has had its eyes on its plan for CoRE for two years, Caldwell said.
“We’ve been opportunistic in that we had a good site and believe in where the market’s going,” Caldwell said.
It’s an expensive time to build any property type, with steady increases in commodities prices and rising interest rates coupled with supply chain delays. Life sciences properties are more expensive to build than lower-tech options, due to the need for things like reinforced floors, advanced HVAC and taller height clearances.
But it’s a problem Lincoln Property is prepared for and believes that the demand for the space in metro Denver will bring rents that justify the higher costs.
“We are already seeing transactions in some of the older product that would be consistent with what we’re looking for,” Caldwell told Bisnow. “Demand is strong and is only growing in this area.”
Lincoln Property has experience developing life sciences space in other markets, like San Diego and Boston, but this is its first foray into the property type in metro Denver. The company owns several other property types here, including multifamily, office and retail.
The first phase of CoRE is working its way through the planning approval stages, and Caldwell expects to receive a permit for the project this fall, resulting in the delivery of the initial phase in the first part of 2024.