When investing in commercial spaces, building owners and landlords have various options of industries to attempt to attract. Some types of tenant companies are more coveted than others. As of late, building developers seem to love life science companies. Life science companies include biotechnology, environmental and biomedical devices, biomedical technology, pharmaceuticals, and more. The needs of this industry vary greatly as do the types of companies involved. Some require start-up lab space while others require state-of-the-art facilities. When marketing to this industry, it is important to understand the life cycle of life science companies, as well as the many benefits of leasing to them. Sunridge Legal understands why building developers love life science companies, because our legal team has experience handling sophisticated commercial real estate transactions for these types of industries. If you are interested in learning more, contact our legal team today at [email protected].
High Demand
One of the most important aspects of marketing to any industry is having adequate demand. The life science industry has received billions of dollars of investments during the last decade. The COVID-19 pandemic led to exponential growth with companies investing billions more for vaccines, testing kits, and further research and development. According to the White House, President Joe Biden is making healthcare a priority in the 2023 budget and is requesting billions of dollars to go to the top health organizations. Cushman & Wakefield’s report that demand in the life sciences industry is expected to continue for years to come. This position is also evidenced by low vacancy rates for these companies throughout the country.
Steady capital investments, a large market, and attention on the industry are strong indicators of the reliability of this industry. This tremendous growth and steady incline have made life science companies outpace logistics and manufacturing companies. In some markets, the demand for space is greater than supply, which can be a way for commercial real estate investors to maximize profits through higher rents.
Speed
Another reason why building developers love life science companies is that these companies are fast and decisive. Once a company starts up, they immediately take steps to secure an appropriate building. Landlords and developers do not have to worry about these tenants mulling over many options and waiting months to negotiate a deal. Biotechnology companies must move quickly to outpace competitors and secure a significant portion of market share.
This factor has become particularly poignant during the COVID-19 pandemic with multiple companies racing for a cure, viable vaccines, and clinical trials that are completed at breakneck speed. However, life science companies are not restricted to only the latest pandemic. An aging population, a desire for more affordable healthcare options, and an increase in technology have bolstered other advances in the space, including:
- Medical devices
- Prescription drugs
- Personalized medicine
- Gene therapies
- Biotechnologies
- Wearable medical devices
Additionally, the life science companies of today are much different than those of years past. Venture-capital backed startups are a big part of the industry, but they may not have the necessary capital to buy their own fully purposed laboratories. As these businesses are successful, they must quickly graduate from shared incubators to leased laboratory space. Many life science companies work in clusters with each other and move to life science hubs.
Ability to Adapt
Many spaces became vacant during the economic downturn. Therefore, there may be plenty of available spaces that can be adapted for the needs of life science companies. Every laboratory has its own needs, but there are often commonalities that these businesses have for their lab space. This can make it easier to adapt other spaces for life science companies so they can be repurposed for these companies.
It is often easier for developers to redesign their available spaces for earlier-stage life sciences companies that may not need as many of the technical requirements as more established companies. Buildings that were initially constructed for other uses may still have features that life science companies can benefit from, such as:
- Strong HVAC systems
- High ceiling heights
- Energy-conserving features
- Large loading docks
- Steel or concrete structures
Societal Benefits
Another benefit of supporting life science companies is feeling involved with their mission, which often offer societal benefits such as:
- Expanding medical care to underserved communities through telehealthand personalized technologies
- Researching initiatives to combat climate change and promoting alternative energy and green building techniques
- Promoting wellness and preventative care
- Increasing jobs in the industry
- Developing talent in qualified workers
- Encouraging collaboration among different companies for the betterment of society
- Promoting social justice and allocating resources to underserved communities
- Creating new public policies to better serve society and decrease inequity
How a Commercial Real Estate Lawyer Can Help
While life science companies have dramatically increased in number over the last few years, there is a limited number of professionals who are acquainted with their unique needs. The commercial real estate lawyers at Sunridge Legal have the unique knowledge to help you review your options and walk you through the process of securing commercial real estate buildings or negotiating deals with potential tenants.
We also understand that life science companies may have different needs and can help you address them. For example, you may be marketing to one or more of the following:
- An R&D company that is in the discovery phase
- Biotech companies that need traditional labs and offices
- Pharmaceutical companies with highly specialized labs for screening
- Life science companies that are conducting in-vivo studies
- Companies specializing in product development or manufacturing
Some companies may have different facility requirements you are not used to. We can help negotiate terms in your lease to clearly indicate who is responsible for installing such features.
Contact Sunridge Legal for All of Your Commercial Real Estate Needs
While building developers love life science companies, anticipating their needs can be difficult. The commercial real estate lawyers at Sunridge Legal can help you with your commercial real estate transactions and help ensure your legal and financial rights remain protected. Contact our legal team for a free consultation at [email protected].
