Help Wanted: Life Sciences Real Estate Expertise Is In Short Supply
The rapidly expanding life sciences sector is currently battling many shortages, including an overall lack of talent and lab space, two key factors holding back even more robust growth.
But one key set of actors within the industry ecosystem — experienced life sciences real estate brokers or property managers — is increasingly becoming a harder-to-find hire, creating another shortage that’s holding back more growth.
“This group of professionals that have deep life science experience is still relatively small, across all functions,” Longfellow Manager Director of Human Resources Natalie Orlofsky said. “The talent supply is still catching up with the rapid ascent of the life science asset class.”
As real estate firms ride this wave of growth and expansion, they must address an increasingly pressing question: Are they investing enough in their own workforces?
“As industry grows, the ecosystem also grows, and the workforce needs to grow,” said Dr. Suzet McKinney, Sterling Bay principal and director of life sciences, who was hired by the development firm from the public health sector. “So what are we doing to ensure that the workforce pipeline is where it needs to be in order to keep up with that growth?”
The answer isn’t exactly clear. Many local business development or industry groups are aware of the real estate challenges and the lab space shortage — Biocom California, for instance, is holding summits with local government leaders to focus on zoning changes needed to accommodate more lab construction — but they aren’t funding or providing educational or learning opportunities for real estate professionals to enter the field.
“These labs aren’t created equal, brokers aren’t created equal, and project managers aren’t created equal,” Savills Executive Vice President and North America Life Science Practice Lead Austin Barrett said. “Finding these skills and capabilities is super hard right now, because you’re seeing such a flurry of conversions and developments, and landlords and brokerages are all out there looking to hire for very specific skills.”
Some real estate firms are increasingly turning to atypical hires, looking outside the real estate industry to find life sciences staff who can make the jump into a new industry. But that still isn't the typical recruitment avenue.
“The field is growing so fast nationally, I believe this is an opportunity for the real estate community to innovate or think differently in terms of the types of talent they bring on board to lead their life sciences division,” McKinney said. “What I’ve seen from many firms across the country is people leading life sciences verticals are more traditional real estate people.”
At the same time, the desire for many traditional brokers to break into life sciences real estate has created a glut of self-proclaimed specialists with the enthusiasm, but not the expertise. Barrett isn’t surprised; with office leases down over the past 18 months, and brokers working on commission, it’s no wonder many would try to pivot.
While there technically may not be a shortage in terms of the number of brokers, only a small number have the experience to know what to look for or how to help mitigate a client's risk without wasting its time, said East Egg Project Management Principal Yasmeen Pattie, who offers consulting and strategic planning services for firms seeking lab space in New York City.
“I think if all of the developers and all of the tenants in this market only went with this handful, then there might end up being a shortage,” Pattie said.
That competition doesn’t bother Christopher Moe, a Kidder Mathews life sciences specialist in Seattle.
“From my perspective, I don’t have a problem because I’m already a life sciences broker,” he said. “But everyone else who wants to become one, that’s a problem.”
Real estate, like so many other industries, is facing a challenging labor market. Kidder Mathews President and Chief Operating Officer Brian Hatcher said finding talent across all sectors is his firm’s No. 1 issue. It has hired extra recruiters and headhunters, raised salaries and plans to update its benefits packages to improve retention.
But it is still an ongoing challenge; Kidder Mathews hired more than 100 people in the past year, and lost 85 for various reasons, despite spending more on recruiting, Hatcher said.
“I’m at a loss,” he said. “I don’t know where to go, I don’t know what people are doing.”
Luckily, retention isn’t part of the problem in life sciences real estate, Longfellow’s Orlofsky said.
“Retention has been helped greatly by the dynamic nature of life sciences and the industry as a whole,” she said. “Very few industries are experiencing its overall growth that, in turn, offers so many personal and professional opportunities for our staff.”
Life sciences real estate is also especially busy, and especially in need of operations managers for labs. Barrett said the rate of new company formation, with venture capital firms armed with billions to deploy in search of the next blockbuster cure or therapeutic, means his staff is working on dozens of lab programs at once.
What’s lacking is a clear pathway to develop more of this talent to relieve the overworked industry experts. Outside of some webinars, Pattie said, there don't seem to be any formal training efforts.
“This would be an ideal time for the CRE industry to develop some sort of talent development program or pipeline type of arrangement,” McKinney said. “However, I have to be honest, I’m not seeing that.”
Traditional brokers and real estate staff don’t always have clear ways to transition into other sectors, and potential hires outside of real estate may not always be aware of the opportunities. At Longfellow, Orlofsky says that their talent acquisition strategy focuses on functional experience and day-to-day real estate skills, with the expectation that the team can train individuals to pick up specific foundational knowledge.
Educational programs also don’t necessarily have curricula that provide the necessary background on lab spaces and innovation campuses. Marshall Bennett Institute of Real Estate Executive Director Collete English Dixon said she’s not seeing any real estate programs at the collegiate level, hers included, focusing on life sciences skills of experience.
That’s why hiring from the life sciences has so much potential. McKinney points to scientists and researchers who have spent time in administrative and leadership roles as key potential hires, who should understand the research and healthcare challenges and can analyze market trends.
In addition, leadership roles at innovation districts, who tend to be executives with governmental and political savvy who manage large budgets, can play a valuable part at a development firm. At Sterling Bay, McKinney said she’s surrounded by traditional leasing, acquisition and property management teams, so the mixture of her perspective and their real estate experience creates a more multidisciplinary perspective.
RJ Panzo oversees lab planning at Savills and came from the pharmaceutical giant Merck. He said it is a challenge to find people at traditional life sciences firms with the unique set of skills required to succeed in real estate. But it’s worth looking for them, since an understanding of the dynamics of how labs operate is in such short supply.
“From the broker’s perspective, it’s hard to find someone who has done this, so the next best thing is finding someone in the industry who has pivoted, or has helped with lab planning and understands research and strategy,” he said.