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When Office Space To Life Science Space Conversions Make Sense

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As offices sit empty, demand for life science space is flourishing. But that isn’t anything new.

From 2009 to the end of 2019, lab space in the United States grew from 17 million to 29 million square feet, according to Bloomberg.

“But building that space from scratch is expensive,” according to Jennifer Luoni, director of operations at Dacon, a Boston-area design build firm.

Luoni helped design ABI-LAB 2, a four-story life sciences incubator, a building in Natick, Mass., that contains 22 small labs, for a client a year and a half before COVID hit.

“It’s a big capital investment to build a lab and get the equipment that you need,” Luoni tells GlobeSt.com. “And you’re not sure if what you’re trying to research or build is going to go anywhere. Sometimes trials can take many years to create.”

With companies offering to rent to the lab supplies that life sciences companies need, it is possible to convert conventional office spaces to meet research needs. But those transitions aren’t easy. Just building walls and putting in a lab bench won’t do the trick.

“You may be able to do lab work there, but you won’t have the correct air flows,” Luoni says.

Luoni says all labs should use 100% outdoor air and exhaust directly to the outside as well as a separate system in place for fume hoods. For an office building to be a good candidate for a life sciences conversion, it needs a ceiling height of 14 feet or more. In many cases, additional ductwork for HVAC will be needed above the ceiling.

“HVAC is a huge component and so is the ceiling height,” Luoni says. “A plenum for return air is not used so it needs an actual ducted return.”

These buildings also require a generator for backup power and infrastructure to transporting lab equipment into the office space.

“You really need some kind of freight elevator that can get equipment up and down. You need to be able to have loading capabilities at the building,” says Luoni.

Overall, Luoni thinks single-story offices provide the most efficient transition to life sciences.

“The roof is easily accessible for ductwork and equipment access to a single floor is easier, although one story buildings may not have the necessary square footage to make the conversion worth the return,” Luoni says. “It’s harder with the multilevel buildings because a lot of office buildings are not built with sufficient ceiling height.”

It isn’t just expensive to retrofit office buildings to lab space. Building new lab space costs more than developing new office space. For that reason, it doesn’t make a lot of sense to rent out new lab space as office space, according to Luoni.

“If you have a high-level lab space, it always could be used as an office space,” Luoni says. “But I think you would hope that that doesn’t convert until down the road and you’ve made your money back because the rental cost of the lab is going to be a lot higher than an office. When you build a lab that has all of this infrastructure, it would be a waste of money to convert it back to an office. That is a financial detriment. Wise investments are based on the long term.”

 

Source: GlobeSt.

Miami Property To Be Rebranded And Repositioned As Medical Office Space

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Transwestern Real Estate Services’ (TRS) South Florida Agency Leasing team has been selected to exclusively lease 6262 Sunset Drive in Miami, a 96,779-square-foot, eight-story office building at the epicenter of South Miami’s healthcare hub.

Transwestern Senior Vice President Christopher Dubberly will lead the leasing efforts on behalf of building owner USAA, as well as direct the property’s repositioning from traditional office to medical office space. The building will be rebranded as Sunset Medical.

“Sunset Medical is ideally located at the footsteps of South Miami Hospital’s campus. Returning the available space to its highest and best use will appeal to physicians and healthcare providers seeking premier medical office space in a market with less than 5% vacancy,” said Dubberly. “There’s a strong underlying current of pent-up patient demand for services postponed by stay-at-home restrictions. Repositioning this property to medical office now makes it an extremely attractive option for practices that are challenged with how to handle the surge in procedures and surgeries expected the latter part of the year.”

For the past 22 years, the property was 100% occupied by a single tenant that has now consolidated into the top two floors. The remaining 43,064 square feet of availability on floors one through six offer direct entry from the parking garage – a unique feature in the market and highly desirable amenity for medical office space because it eliminates the need for tenants and guests to use elevators for suite access.

“The property also provides high-profile signage opportunities along heavily traveled Sunset Drive,” said Dubberly. “Ownership has committed to renovating the building lobby and elevators, further increasing its premium market appeal.”

6262 Sunset Drive is adjacent to Baptist Health South Florida’s South Miami Hospital campus, benefiting from the hospital’s power grid and equipped with a generator, providing secure business continuity. The average household income within 3 miles is $134,215, and the population is greater than 111,000 residents, which expands to more than 350,000 people within 5 miles. The property is walkable to Metrorail’s South Miami station, as well as local restaurants, shopping districts and entertainment venues.

 

Source: HREI