New Speculative Biomanufacturing Development Begins Construction At Philadelphia Navy Yard
Some supply is finally on the way to meet the soaring demand for biomanufacturing space in Philadelphia.
On Dec. 3, Gattuso Development Partners announced it has begun construction on a speculative, 130K SF biomanufacturing, lab and office building at 2500 League Island Blvd. in the Philadelphia Navy Yard. The project is backed with joint venture equity capital from Boston-based The Baupost Group and a construction loan from Citizens Bank for what Philadelphia Business Journal reports will cost upward of $50M.
Upon completion, projected for the fourth quarter of next year, the facility will be able to support a full-building lease or be subdivided for multiple tenants, the announcement stated. Its biomanufacturing facilities will be designed to satisfy the standards of Current Good Manufacturing Practices, with the remaining lab and office space designed as support for the type of company the property is targeting, Gattuso co-founder and principal John Gattuso told Bisnow.
"It’s a building aimed at companies as they go into full-scale production and commercialization of their therapies," Gattuso said. "Typically, those would be tenants ranging from 30K to 130K SF, or maybe even a little bit more.”
With billions in funding from both the National Institutes of Health and venture capital pouring into Philadelphia for its groundbreaking work in cell and gene therapy, dozens of startups have nearly filled the existing life sciences space in the city to capacity, creating a race to develop more through new construction or conversion of office or former industrial buildings.
Speculative lab buildings are currently under construction at University City's two neighboring megaprojects in uCity Square and Schuylkill Yards. CGMP space is Philly's biggest need in order to retain the companies birthed by its academic institutions as they get approval for their therapies and enter production.
The most readily available such space in the area is at The Discovery Labs in King of Prussia, but with 2500 League Island Blvd. and the redevelopment of the former Budd Co. plant in North Philadelphia, a crucial infusion of biomanufacturing supply is around the corner.
Gattuso co-founded his own company after leading Liberty's projects at the Navy Yard when it was the area's master planner. After Liberty exited the Navy Yard as part of a pivot away from office development that culminated in its acquisition by industrial giant Prologis, Gattuso's first project on the grounds of the former military complex was a build-to-suit facility for Iovance Biotherapeutics, which reached completion in the past few months, Gattuso said.
The partnership of Mosaic Development Partners and Ensemble Real Estate Investments has since been tapped by PIDC to lead the Navy Yard's next phase, and Gattuso's latest project will go up on the final piece of land once controlled by Liberty. The 109 acres now controlled by Mosaic and Ensemble do not represent the entirety of developable land at the Navy Yard, but PIDC would require any construction not led by the partnership to be a build-to-suit for a prearranged tenant, Gattuso said.
Mosaic and Ensemble are expected to begin construction on their first project in the Navy Yard, a 100K SF speculative lab building, in the coming weeks. The partnership is awaiting an anchor tenant to kick off a build-to-suit biomanufacturing project of its own.
The project at 2500 League Island Blvd. represents the first investment into the Philly region by the Baupost Group, potentially indicative both of Philly's growing stature as a life sciences hub and its position as a less mature market than Boston with more potential yield. A JLL team of Ryan Ade and Brett Segal arranged the loan with Citizens Bank.
CORRECTION, DEC. 7, 10:45 A.M. ET: A previous version of this article's headline misstated the relationship between the property at 2500 League Island Blvd. and former Navy Yard master developer Liberty Property Trust. This article has been updated.