Labs and Sciences: Consider This for Adaptive Reuse

The lab and life sciences industry is seeing a spike in interest from real estate investors. But building owners should take note: this specialized industry comes with its own unique real estate considerations.

If you’re in the business of commercial real estate you’ve no doubt heard the buzz on lab space and an industry working overtime to meet the demands of scientific needs.

Compared to office buildings, lab requirements are considerably different and require detailed and thoughtful planning to be successful. While there is no one-size-fits-all, Gensler’s sciences and office building leaders have noted, “the key challenge is marrying the unique aspects of an existing building with the unique specifications for science facilities the user organizations the building may house – from basic biology and chemistry to bioinformatics and clinical research.”

Converting a building for a specific tenant is one challenge — converting a building without knowing who the tenant(s) will be presents another set of challenges that must take into account several target tenant types, all requiring test-fit iterations. This is noteworthy because the future lab is no longer standalone. Like so many things today, the future is a hybrid. “If you’re designing a life science campus, the lab isn’t concentrated in one building over there,” says Scot Latimer, Gensler’s global health sector leader. “The lab is everywhere, and there’s a lot more emphasis on connections.”

Nuances between office buildings and lab sciences buildings, while seemingly small, may have a significant impact on the building measurements — and ultimately the ratio of rentable to usable space, or R/U factor. Some areas that play into this are:

  • Additional service elevators and loading docks
  • Ventilation and electrical systems on intermediate floors
  • Size and number of hazardous material control zones

Additionally, within the building itself, consideration for how the space will be measured, who will use the information, and any deadlines requiring these measurements should be taken into account by the planning team. This becomes particularly important for multi-tenant scenarios or any type of a mixed-use building. Local market conditions will also play a role in selecting a measurement methodology. Particularly “hot” markets or geography alone may be a factor.

The need for accurate data is further illustrated by a group of New York professionals, who in 2018 launched the NYC Builds Bio symposium to create dialog around the need for lab and scientific buildings:

“The shortage of supply is further complicated by a lack of knowledge and understanding amongst the New York real estate community about the potential for the market, the specialized infrastructure required by life science companies, and the financial components of development and lease transactions for life science companies.”

Each of the statements in bold will use area measurements in the decision-making process. Leases for these space types are significantly different from traditional commercial lease arrangements, particularly in their provisions relating to tenant improvements, hazardous materials, building services, subletting/assignment, and security deposits/letter of credit.

Gensler has developed a matrix outlining four measurement methods typically used for life science buildings and the impacts these approaches have on gross, usable, rentable, and load/loss factor. We’ve paired that with market examples where each measurement method sees use. These include:

  • REBNY
  • Gross Rentable Area
  • Modified “BOMA”
  • BOMA Office Building Standard

Note: When creating a deliverable, BOMA does not recognize “modified BOMA”. If it doesn’t follow the BOMA Standard, then one can’t use the BOMA name to describe it.

Whether the building is being converted as a spec lab or for a specific tenant, a solid understanding of the building and how different layouts affect the rentable area is valuable information to have to support real estate strategies. An owner or developer must present a competitive package. A tenant will look for a good value in comparison to other options in the market. Using an objective third party to conduct a measurement study helps all involved speak the same language, reduce ambiguity, and improve transparency in how rentable numbers are calculated.

Need a BOMA Study? Learn more about Gensler’s Building Measurement Services or contact us at 844.412.9251 | .
Mark Thole
Mark leads a global team focused on innovative solutions in corporate portfolio management, utilization studies, and program management. With experience in human resources and project management, much of his work has focused on systems that help business derive immediate value on two of their most important assets: people and real estate. Mark is based in La Crosse, Wisconsin. Contact him at .
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