More Than Beakers And Pipettes: Biotech Developments Go Big
Cities across the U.S. have spent the last two years grappling with how to reinvigorate formerly bustling areas, a goal complicated by economic unease, but one corner of the CRE development world — life sciences — is betting big on creating its own buzz with huge new projects that could meld with the cities they inhabit.
Borrowing from Big Tech and the self-contained hamlets companies like Apple and Facebook built for themselves in Silicon Valley, life sciences companies want to provide a comprehensive experience where employees can access more than just their work. But unlike Big Tech, they also want to interact with the public.
“People will come just for the park, to have wine and see the symphony at Helix Park,” Texas Medical Center President and CEO Bill McKeon said about a coming 37-acre expansion of his facility. “We don’t want them to feel like they’re coming to Beaker Village or Pipette Land. They don’t even have to know the research is happening in these buildings.”
The $1.8B Helix Park project in Houston will be a multi-use expansion focusing on attracting life sciences firms and represents a hoped-for turning point in the city’s biotech sector. This critical mass of lab and research space will ideally spur additional spinoffs and startups.
But it also represents a new generation of development for the institution, the city and life sciences. The existing medical center, a dense 2.1-square-mile campus crowded with tall buildings and lacking green space or significant retail, will stand in stark contrast to the forthcoming TMC Helix Park, with curvilinear lab buildings arched around a “necklace” of park space meant to recall the shape of the DNA helix.
Performance spaces, links to surrounding parks and trails and strategic retail tenants will round out the mixed-use purpose of the development, McKeon said.
TMC’s take on placemaking — expanding green and outdoor space, creating so-called third places for the public and introducing strictly controlled retail and events programming — has become a central part of many large-scale, urban life sciences projects across the country.
Especially as the office market softens, and less active central business districts continue to feel the impact of lagging return-to-work patterns, these new life sciences-led developments are emerging as a potent tool for economic development and real estate growth.
Creating campus-like spaces for innovation isn’t new. Luxurious office amenities, open spaces and a design focus on collaborative working environments has long been a staple of Big Tech offices, startup districts and life sciences projects. But this new generation of life sciences projects builds on those lessons, adding public-private amenities and features such as parks, performance spaces, and even learning centers for workforce training, all in a bid to create more urban, walkable environments to attract talent and spur additional development.
As life sciences has reached greater maturity and become a more established sector, it’s also becoming a bigger player and tool for neighborhood and economic development.
McKeon said the land surrounding TMC Helix Park shot up in value, from below $100 per SF to more than $300, and there have been significant property acquisitions and developments, including the 52-acre Levitt Green project by Hines.
“The knock-on effect has been immediate,” McKeon said.
As the boom in life sciences development pulled back a little this year in response to the economic downturn and slowdown in venture capital funding, there’s renewed focus on high-quality, large-scale developments as an investment that will survive any downturn, said King Street Managing Director Mike Diminico, whose firm focuses on projects in Boston, San Francisco, North Carolina and New York City.
“The third place is critical,” said Diminico, referring to the concept of adding social spaces to larger life sciences projects. “It’s especially key today when the value of coming into the office is in question, not all life science workers are doing research in the lab, so it’s important to give them a reason to come in and feel connected to co-workers.”
Building community has always been an essential part of successful life sciences development, said Nancy J Kelley, president and CEO of Nancy J. Kelley + Associates, a life sciences consulting firm. But it has been much better understood in recent years, as the rush to convert office buildings to lab space has underscored that putting down lab space without the right supporting infrastructure just won’t work.
“There’s so much greater emphasis on creating communities, not just places,” she said. “Life sciences and related employment is going to be the growth engine that pulls us through what we’ve been through, amenity-rich communities and healthy environments that are places to live, work and play.”
Large mixed-use projects, centered around life sciences developments, focus increasingly on the creation of more public spaces and third places, and also spurring on development in surrounding areas. Significant developments in the works in Salt Lake City, as well as in Atlanta, near Georgia Tech, aim to build labs and amenities to create new walkable urban districts.
In Morrisville, North Carolina, the Spark LS development, a $1B, 109-acre campus project by Starwood Capital Group and Trinity Capital, will spread 1.5M SF of lab space across more than a dozen buildings, and will feature retail, amphitheaters and high-end dining, according to Trinity Capital Managing Partner Walker Collier, which will show how “real estate can be used to recruit and retain talent.” The project has also attracted multifamily developers nearby, as well as additional life sciences projects.
In downtown San Diego, the redevelopment of the Campus at Horton, a former mall being turned into a mixed-use neighborhood geared towards life sciences and tech tenants by Stockdale Capital Partners, was redesigned during the pandemic to add additional patios and balconies.
The campus-like setting, which will include 700K SF of life sciences and tech space and 300K SF of retail, is meant to tap into the growing life sciences presence downtown, home to 37,000 residents, and connections to existing life sciences hubs via the new Blue Line rail system. A Stockdale-funded economic development analysis found the project would create more than 12,000 jobs and deliver $1.58B in economic activity.
“This is something that’s new for downtown,” Stockdale Capital Partners Managing Director Leo Divinsky said. “This is really addressing many of the post-pandemic concerns.”
A key part of the strategy for many developers is pairing lab space with the right retail and entertainment options.
King Street’s Diminico said his firm typically focuses on choosing the right retail and restaurant tenants, with a focus on local companies, and nabbing craft beer, good coffee and art venues. He assumes King Street will get below-market rent, and pay substantial tenant improvement costs, but said it is worth it to land just the right retail mix, attract the right life sciences tenants and create a more interesting, viable and desirable neighborhood.
TMC Helix Park is taking a similar approach. McKeon said they have “condominiumized” the retail within the development, buying and controlling every space so the Texas Medical Center can program the entire development and avoid a random mix of tenants.
Many such developments have also focused on more flexible spaces that can serve as venues for arts, lectures, meetings, performances, and even workforce training, creating more purpose-driven locations that aren’t just another retail experience.
“There needs to be real places to have these developments work, not just retail.” said Perkins&Will Science & Technology Northeast Regional Practice Leader William Harris. At the forthcoming Assembly Innovation Park in Somerville, Massachusetts, one of his designs, the development will center around a 1-acre park. Other developments feature a learning lab on the ground floor for workforce development and education.
Cities have increasingly seen the value of supporting these projects, especially in the wake of a significant slowdown in tech and traditional office development. For example, Kelley added that New York City’s economic development strategy focuses on designing innovation hubs for life sciences and backing the goal with a billion dollars in city funding, Kelley said.
“This kind of development is really going to help the city come back,” Kelley said. “New York City should become a life science hub.”