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Texas Woman’s University To Break Ground On $107M Health Sciences Center In Denton, Texas

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Texas Woman’s University (TWU) will break ground on a $107 million health sciences center in Denton on Friday, Sept. 15.

The new 136,000-square-foot health sciences center will be built on a seven-acre site adjacent to a Texas Woman’s University student housing complex in Denton, Texas.

The 136,000-square-foot facility will serve students in the allied healthcare fields such as nursing, physical therapy and occupational therapy. TWU states the goal of the center is to graduate 30 percent more nursing and healthcare professionals, with a special emphasis on preparing students to serve in rural settings.

The new health sciences center will be constructed on seven acres adjacent to Parliament Village, a TWU residential complex housing 872 students. Plans for the facility include laboratory space, classrooms, collaborative workspaces, outdoor clinic sites and a teaching kitchen, as well as community healthcare clinics and training areas for students.

Alongside the groundbreaking, TWU will launch the public phase of the $125 million Dream Big Campaign. This is TWU’S first comprehensive fundraising campaign. The Dream Big Campaign is intended to commemorate university’s 125th anniversary in 2026.

TWU is a public university that was established in 1901. The university’s main campus is in Denton, with additional health science centers in Dallas and Houston. While TWU admitted its first male students in 1972 and has been fully co-educational since 1992, the school is the largest state-supported university primarily for women in the United States.

According to the university, funds raised from the Dream Big Campaign will support TWU’s growth and development in health and life sciences, financial and business services, entrepreneurship, technology and aviation fields.

 

Source: REBusiness Online

Life Sciences More Than Doubles Sector Investment After Pandemic Upheaval

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After more than a year of grappling with a historic global pandemic, and the ensuing upheaval that impacted every established economy and industry across the world, one sector of commercial real estate has prospered so effectively that venture capital funding more than doubled from first-quarter 2020 to the same period in 2021.

According to a new report by CBRE, “U.S. Life Sciences: The Biotech Revolution Emerges Even Stronger Post-Covid-19,” this is exactly the state of the life science sector today, and it may be the salve that helps heal an industry in the wake of an unprecedented public health and economic crisis.

“While there’s so much upheaval in commercial real estate — whether it’s offices, retail, hotel, what have you — life sciences, laboratory R&D space, and manufacturing have only strengthened,” said Ian Anderson, senior director of research for CBRE, who authored the report. “I don’t think there’s one element in the data where we haven’t reached a new record as we speak, and it just continues to get stronger.”

In addition to the massive increase in venture capital funding, CBRE reports that the demand for life sciences space across all major markets has grown by 34 percent since mid-2020. And, while more than 15.6 million square feet of speculative space is currently under construction, it is exceeded by tenant requirements being driven, in part, by massive increases in the sector’s employment.

“U.S. life sciences employment reached a record high in March 2021, driven by the revolution in biotechnologies and other industry advancements,” read the report. “Industry job growth has jumped nearly 15% since March 2017, surpassing growth in the technology sector.”

As venture capital, employment and general demand grow, so have rents throughout major life sciences markets. The report’s findings include a close to 50 percent increase in lab and research and development rents in the Boston-Cambridge cluster, and almost 40 percent for the same sector in San Diego since the end of 2017. Life sciences rents in Philadelphia, meanwhile, have increased by 35 percent since the middle of last year.

All of these drivers have combined to position life sciences as a dominant sector in commercial real estate in 2021 and beyond, as investors clamor for involvement and seek investments that provide stability in the midst of widespread market volatility.

“The COVID-19 pandemic fueled some of the alternative sectors, so health care, data centers, and life science centers were some of the beneficiaries of investors moving away from more traditional product types and into more purpose-built facilities,” said Chris Bodnar, vice chairman and co-head of Healthcare & Life Sciences Capital Markets at CBRE. “The investor pool is looking for that stickiness of the tenant going forward, especially in light of what’s happened in the office sector and concerns about how work-from-home will impact renewal probabilities.”

The evidence is especially strong in New York City, where “ … lab leasing activity has already reached a record high for a single year, at 257,000 square feet through May 2021,” according to CBRE’s findings. As contributors to the increase in activity, CBRE highlighted the Icahn School of Medicine at Mount Sinai’s recent lease of 165,000 square feet of research-focused space at 787 Eleventh Avenue, and also noted C16 Biosciences’ 19,000-square-foot lease at the Hudson Research Center, where the Bill Gates-backed startup will relocate from its incubator space at BioLabs New York.

According to Anderson, the explosion in demand for life sciences investments over the past five to six years marks the coalescence of numerous trends, including the fading effects of the 2008 recession leading to greater economic optimism, more accessible capital, insurance companies pressuring corporations to find more cost-effective solutions, rapid advancements in technology, the pandemic-driven decline of other sectors, and the extraordinary investment in the search for solutions to the COVID-19 pandemic.

“In many cases, the fact that so many other industries were in distress caused investors to look for brighter opportunities,” said Anderson. “Real estate developers and venture capitalists all of a sudden saw a new industry in the spotlight.”

Bodnar also sees three other reasons investors are going all-in on life sciences.

“One is, you can’t do research from home. Putting lab space in your home is not a viable option,” Bodnar said. “No. 2, we don’t anticipate [National Institutes of Health] funding for this sector slowing down anytime soon —we only see it accelerating. And No. 3 is that venture capital funding is accelerating. Capital flowing into this sector from private equity and venture capital is growing exponentially, and this doesn’t go unnoticed by real estate investors, some of whom are even making investments as venture capital partners with biopharma companies.”

Given all of these market forces, it’s unsurprising to see owners converting real estate initially dedicated to other sectors into life sciences facilities.

“You’ve got a lot of commercial real estate holders — could be owners of suburban office buildings or even downtown office buildings — looking for some type of silver lining; some type of better exit for themselves. So, they’re looking at converting to labs,” said Anderson. “Office owners have been through such a troubled time over the past year, and some of them have been carrying buildings in distress for many years. So, they see a potential opportunity to make a quick and easy out, and convert their office building to laboratory.”

“We’ve even had some groups talk to us about converting medical into life sciences,” said Bodnar.

And, while life sciences is now pulling from other sectors, it’s also spreading into geographical areas beyond traditional clusters like Boston-Cambridge, the San Francisco Bay Area and San Diego.

“Raleigh — one of the hotter markets — is more traditional, but that market is just so impressive,” said Anderson. “Not only have we seen huge demand for laboratory R&D space, but also for biomanufacturing and high tech. So that market continues to impress. Pittsburgh has also been impressive. And a few that are emerging that we haven’t talked about in the past as much are Portland, Salt Lake City and Dallas. They’re probably in the beginning stages, but we’ve seen a lot of venture capital go into those markets.”

Taken all together, the report’s findings indicate that while life sciences has been the notable winner in commercial real estate throughout the pandemic, it’s possible we still haven’t scratched the surface of how strong the life sciences sector will become.

“I’ve been tracking this space for years now, and it just continues to get stronger and more intense each year,” said Anderson. “The demand for laboratory R&D space by the life sciences industry is stronger than ever.”

 

Source: Commercial Observer

Developing Life Sciences Real Estate At The Speed Of Innovation

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Speed always has been a hallmark of the life sciences sector, with first movers standing to gain considerable market share while delivering much-needed medical devices and pharmaceuticals to the public.

But the race to produce a COVID-19 vaccine and related therapies is unlike anything that has come before, with a dozen potential vaccines already entering Phase 3 clinical trials only months after the virus was identified.

While we don’t know exactly when a COVID-19 vaccine will be widely available, research and development has advanced to combat this global threat at a pace that can only be described as “breakneck.” In contrast to today’s day-to-day progress, the mumps vaccine — considered the fastest ever approved — took four years to advance from collecting viral samples to administering a licensed drug.

Hopefully, COVID-19 is a once-in-a-lifetime event, and there won’t be a need for a worldwide, all-hands-on-deck effort in the future. But the lessons the life sciences space is learning now about fostering innovation, creating efficiencies, and coordinating activities across research, development, manufacturing, and distribution will shape the industry in the years to come.

Those lessons inevitably include new thinking about the space where life science work happens, especially in R&D labs that are the origins for so much of today’s groundbreaking discoveries, but also in administrative and other services that support this work. Any real estate decision made today will have real-world implications for years to come, so it’s imperative that companies get it right and meet the demand for prescription drugs, personalized medicine, gene therapies, and other emerging solutions.

The Changing Nature of Life Sciences Innovation

Life sciences companies look different today than they have in years past, when massive pharmaceutical companies and smaller, more nimble biotechnology firms dominated the space. Today, much of the innovation is driven by venture-capital-backed startups, which don’t have the operating capital to build expansive corporate campuses and purpose-built labs.

These companies graduate from shared incubators to leased lab space, often in life sciences hubs like Boston, San Francisco, and San Diego where academics, research institutions, and talent pools coexist. While every lab has its own sophisticated needs, there are enough commonalities that existing lab space can be modified and generally repurposed as companies evolve and expand.

One of the downsides of this concentration of life science innovators is available lab space is leased quickly in today’s market. Life sciences companies tend to group together, whether in city centers or suburban hubs, and while companies can and do lease space that is further removed from existing clusters, it can be difficult to attract the talent that is so vital to driving innovation if the research facility isn’t in the right area.

Even when lab space is available, companies must be diligent in determining whether the existing space can support their work. A former biological lab is more easily converted to new biological efforts, rather than reworking the space for chemistry, for instance. And just as innovation has accelerated new solutions for the public, the methods that drive lab work also have evolved, with new equipment and research approaches dictating how the space is conceptualized.

Redeveloping Alternative Property Types

Given the competitive landscape of existing lab space, earlier-stage life sciences companies may initially land in buildings not necessarily designed for lab work. While labs carry special requirements not common in other development types — including greater ceiling heights, unique lab equipment, more robust HVAC systems, and structural considerations — developers are increasingly trying to lure life sciences companies that want to remain in high-demand areas without building from the ground up and look to these repositioned building alternatives.

While the prospect of redeveloping an existing building in a life science sub-market — such as an industrial warehouse or manufacturing facility — is achievable, the challenges associated with fitting out these buildings for the specific requirements of lab work can be complex and costly and require thorough due diligence. These properties, meanwhile, aren’t just there for the taking. Quality industrial and manufacturing buildings are in high demand as a result of changing consumer habits, which have been shifted by COVID-19.

The repurposed universe consists almost entirely of steel and concrete structures. Wooden structures are often the cheapest to lease or develop but they don’t offer the inherent requirements for chemical control zones and other protections of more robustly built properties. Attempting to retrofit a wooden structure to support lab science work has inherent limitations, which developers should take into account.

Managing High-Cost Items

The most expensive and unique aspect of a lab build-out are the mechanical, electrical, and plumbing (MEP) systems, which, along with lab benching, push the project cost into the hundreds of dollars per square foot, even when the space meets other structural and space considerations.

These expenses affect the entire development, not just the lab space. A tenant with an equal split between lab and administrative workers may desire typical office amenities: high, open ceilings and ample free space. Similar to the technology-based offices of today, these features come at a premium and will likely be separated from the laboratories.

MEP and equipment considerations aren’t exclusive to redeveloping non-life sciences buildings either, as existing systems in former labs may be outdated and not easily adaptable. These often end up on the scrap pile, replaced with modern equipment in a similar process to bringing in new MEP systems to former warehouses or manufacturing facilities. However, second- or even third-generation lab buildings typically have the structural, ceiling height, and routing of the MEP systems considerations already deployed.

Additionally, not all labs serve the same purpose; some special lab equipment will require unique customization of the space, which must be identified and incorporated early in the design process. Buying only the equipment that is needed can save money up-front and over the long term. Unnecessary lab equipment comes with a high energy draw and heat load output, both of which can contribute to unnecessary costs for years to come.

Today’s labs are run differently than those of decades past: There is a stronger connection between time spent in the lab, related office or computer activities, and collaborating with coworkers. This significant change in work patterns calls for streamlined workflow and a more efficiently designed space that naturally supports the different types of work being performed. A better flow between the lab space and office space can increase productivity as well as optimize usable square feet — and rent.

Best Practices for Embarking on New Real Estate Projects

As long as speed is a factor in life science development success, expanding lab space will be an important consideration for many companies. Though the development and redevelopment process is costly and complex, it doesn’t have to distract from the essential business of creating life-saving and enhancing breakthroughs.

Taking a creative, practical, and flexible approach to building out lab space can help life sciences companies compete, both now and well into the future.

 

Source: Life Science Leader