Billions of dollars are flowing to academic life science centers to seed startups and real estate companies

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The Bakar BioEnginuity Hub in Berkeley will add to the pipeline of companies filling lab spaces in the Bay Area.

This fall, when the University of California, Berkeley opens the new 40K SF Bakar BioEnginuity Hub, the startup incubator will arguably be one of the most visually striking places where life science research is conducted.

The Old Campus Library, a Brutalist design that is both historic and on the national register, has already attracted great interest, particularly from start-up companies focused on therapeutics, bioremediation, synthetic biology and CRISPR technology, said Gino Segre, CEO of Bakar Labs.

“There’s a pipeline, and it starts at the source,” Segre said. “The source could be any University of California campus, or anywhere in the world. Bakar is yet another portal that will allow the world to make their way to the Berkeley campus.

Segre said the cost of developing the project is private and the rent would be “the fair market price”. Bakar will not only help the university conduct and promote high-level research. It will become the starting point for startups and ideas for the broader Bay Area life sciences industry – any company or startup, not just those with ties to Berkeley, can apply for the program, which is designed to help grow businesses that will eventually become tenants of future laboratory space and office developments.

“Incubator space in the Bay Area is at an all-time low,” Segre said. “Although the university is not in real estate, something like Bakar becomes a very good driver.”

Across the country, a number of notable new university life science projects are being developed, either on campus or in adjacent neighborhoods. In the premier San Diego market, San Diego State University is developing the 80-acre Mission Valley complex, which will include life science facilities. In Houston, the 37 acres, $1.5 billion TMC3 project, a massive mixed-use development with an iconic green helical park in the middle, will seek to channel ideas and innovations from the city’s medical center into full-fledged businesses. And in Pittsburgh, a vacant 1915 Ford Motor plant will be renovated and reborn as The Assembly, a $330 million biomedical research center anchored by the University of Pittsburgh.

The design of these spaces should be aimed at nurturing new businesses and accelerating the path to commercialization. Segre said that means common spaces with shared equipment — refrigerators, freezers, centrifuges and tissue culture space — that ensure companies don’t waste capital and time reaching business and professional milestones. Centers need flexibility to accommodate companies of all sizes; companies can rent a single lab bench or half a freezer shelf. Proximity to the university’s legal and technology communities, as well as nearby restaurants, bars, and social spaces, also helps.

“They may not share the IP, but they can share an IPA at the pub across the street,” Segre said.

Along with increased venture capital funding and federal research funds, these projects may be market signals for developers looking to see where future life sciences tenants will emerge.

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Courtesy of Brandywine Realty Trust and Gensler

3151 Market at Schuylkill Yards is designed to accommodate a variety of tenants and startups.

Gensler’s senior partner and chief science officer, Erik Lustgarten, said there was already huge potential for energy and growth in life sciences before the coronavirus pandemic hit, and now the demand for a well-educated workforce and the research facilities needed to turn basic research into more important ideas and therapies is driving many universities to invest large sums in new life science hubs, or dedicated campus facilities , or partnerships with developers. These are the first rungs of the marketing ladder.

“There is a continuum in the development of a promising therapy, and it starts with the idea that comes from a university or an academic medical center,” said Lustgarten, who has designed many science facilities from life, including the upcoming 3151 Market St. project at Philadelphia’s Schuylkill Yards. “The ability to start and rent just enough space to do your work, potentially through an incubator or lab coworking business, gives you the space to become a graduate lab when you’re too big for an incubator but too small for an entire lease.”

3151 Market at Schuylkill Yards, a 14-acre development and collaboration between Drexel University and Brandywine Realty Trust, is scheduled to open in Q3 2023 and will feature laboratory space with 15-foot, column-free floors and a series of exterior porches on every other floor intended to recall the porches found in the surrounding neighborhood of West Philadelphia.

Lustgarten said the development was designed with flexibility in mind, so the floors and amenities could easily be arranged to meet the needs of a university client or a biotech startup. Projects like 3151 Market show how the wider ecosystem and real estate investments grow from university buildings and research centers.

Lustgarten cited examples in New York, including the BioLabs facility at 180 Varick near NYC Langone Medical Center, or JLabs, located at the nonprofit NY Genome Center, as well as Lab Central 610 in Cambridge, Massachusetts, a springboard for MIT LabCentral companies. Alexandria Real Estate Equities is a market leader in this type of development, aimed at keeping holding companies in their properties. The right incubation spaces create opportunities for startups and builders.

“A savvy developer envisions giving tenants the next stage of space, having the opportunity for a business to grow within the family, so to speak,” Lustgarten said.

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