The tremendous growth of the global life sciences sector, and its real estate property needs (including construction, leasing activity and funding for new projects), has garnered significant attention from commercial real estate investors.
Currently, between 800,000 and 900,000 square feet of lab space is in demand throughout New York City. According to a CBRE report, some of this required space stems from efforts to combat the coronavirus, and more requirements may arise once shelter-in-place orders are lifted—causing yet another spike in commercial real estate activity.
Since the city shut down in March, interest in leasing at major life sciences properties in the city, such as 345 Park Ave. South, owned by Deerfield Management; the Taystee Lab Building, owned by Janus Property Co.; and Hudson Research Center, owned by Silverstein and Taconic has remained high.
The life science industry has certainly driven demand for lab space over the past few months, but, outside of the development of pandemic-related therapies, what falls under the umbrella of “life science?”
What is Life Science?
The life sciences comprise any science that focuses specifically on living organisms and life processes. This includes anatomy, biochemistry, biology, botany, genetics, immunology, pharmacology, toxicology and zoology, among many others.
Companies closely associated with the life sciences industry often develop biotechnology, medical technology, and pharmaceutical products. These companies and their business models typically focus on research and development to support the advancement of proprietary technologies and intellectual property.
Why is NYC the New Life Science Hub?
New York City is leveraging its key assets of talent, space and capital to become the next global life sciences destination. The city is directly investing in businesses founded by New Yorkers and creating jobs for other locals. By funding incubators, building additional lab space, and supporting cutting-edge research, New York City is building a pipeline that will empower New Yorkers to hold jobs on the frontline of medicine’s future.
Which Companies are Transforming the New York Landscape?
King Street Properties. QNS reported that King Street Properties and GFP Real Estate celebrated breaking ground on an upcoming six story, 267,000-square-foot life sciences facility on Dec. 5, with a ribbon cutting ceremony and an introduction of what the project will entail.
King Street Properties, a Boston-based private real estate investment management firm focused on serving science-based companies and institutions, presented the plans for InnoLabs — the new building that will be located at 45-18 Court Square W. in Long Island City.
Deerfield Management. In September, Deerfield Management said it will invest $635 million toward a life sciences campus in New York City—part of $2 billion the investment management firm has committed toward advancing the development of new treatments, through research and seed funding, by 2030.
Deerfield plans to develop its Big Apple campus at the recently acquired 345 Park Avenue South, a 12-story, approximately 300,000-square-foot Manhattan building that the firm is renovating. More than two-thirds of the renovated space—over 200,000 square feet—will be usable as wet labs.
In addition to turnkey lab facilities, Deerfield envisions the campus including engineering and computing space, as well as other amenities and supportive services. Among those amenities and services will be a healthcare-focused incubator designed to support startups and which will be overseen by MATTER, a Chicago-based manager of healthcare-focused incubators.
Deerfield’s campus is projected to open in early 2021, and foster the creation of 1,400 jobs, according to the public-private New York City Economic Development Corp. (NYCEDC), which is slated to partner with Deerfield in creating the campus.
NYCEDC has named the Deerfield campus as the first in a series of infrastructure and programming investments tied to New York City Mayor Bill de Blasio’s LifeSci NYC initiative, a 10-year, $500 million effort to establish the Big Apple as a top-tier biopharma mecca with 16,000 new life sciences jobs and up to 3 million square feet of new space for companies and institutions serving the industry.
Alexandria Real Estate Equities. Bisnow reported that, in 2018, Alexandria Real Estate Equities reached an agreement with the city to build a 550,000 square foot tower at its Alexandria Center for Life Sciences. The tower would be the third at the developer's campus on FDR Drive between East 28th and East 30th streets. The company also bought The Bindery building in Long Island City, which it plans to repurpose for life sciences, and, with David Werner, acquired Pfizer’s headquarters on East 42nd Street for $360M.
Taconic Investment Partners and Silverstein Properties. Taconic Investment Partners and Silverstein Properties jointly own the Hudson Research Center at 619 East 54th St., which was redeveloped with lab tenants in mind.
Blackstone Real Estate. Blackstone Real Estate has a major presence in life science’s real estate as the owner of BioMed Realty—whose regional development plans include renovating 97,000 square feet of lab space for smaller biotechs at Ardsley Park.
Ardsley Park features 258,754 square feet of office and lab space in four buildings. The company Acorda Therapeutics occupies 165,000 square feet of space on the campus.
BioMed plans to begin renovations in the first quarter of 2020 on Building 440 at Ardsley Park, which has 22,000 square feet that the company said could accommodate up to four life sciences companies by the third quarter of 2020. The plan calls for Building 430, which has 75,000 square feet of space, to be renovated to house up to six life sciences companies. The work on Building 430 is scheduled to be completed in the second quarter of 2021.
Thor Equities. Bisnow Reported in August that Thor Equities is launching Thor Sciences, kicking off the division with the $152M purchase of The Center of Excellence, a 784,000 square foot campus in Bridgewater, New Jersey.
Tenants in the building include Nestlé Health Science, Ashland and Amneal Pharmaceuticals. Thor plans to spend tens of millions expanding the center.
The development of the life sciences as an industry and NYC tenant is fueling job opportunities along with medical innovation. Time will tell if the Big Apple will soon be known as a great global hub of life science progress, but as things stand, the city is well on its way.
