The cost of building new lab space in Chicago is considerably less than on the coast. How can life sciences companies apply this fact to smarter real estate decisions in Chicago?

McKinney: I think it’s important for life science companies to consider the cost of living in Chicago versus that on either coast. Chicago is also a very family-friendly city, with many diverse neighborhoods and communities where employees of life science companies can benefit from the rich cultural and artistic benefits that Chicago has to offer. Thinking through these considerations will help life science companies make smarter, more economically sound decisions not only for their businesses, but also for their employees.

halik: All construction projects nationwide are feeling the supply chain crisis and material price volatility. The life sciences sector is not immune. However, real estate prices in Chicago are cheaper than coasts that are home to major life sciences hubs like San Diego and Boston, bringing down the overall cost of the project. In Chicago, it’s worth considering submarkets like Fulton Market and Lincoln Park where there’s room for expansion and existing space suitable for labs. In addition, new buildings constructed for laboratories will be more profitable than the adaptation of a non-specialized office building. In addition to the cost of real estate, other cost variables include lead times and the availability of special laboratory equipment and furniture. However, savvy teams will order early and lock in prices to stay on budget and on schedule.

Converting office space into lab space is one of the hottest topics in commercial real estate today. Are there any important pitfalls to avoid?

halik: Mixing traditional office activities with clinical research can create unexpected and tricky scenarios that need to be managed with care. For example, a traditional office environment would not need to think carefully about the waste disposal path. A major pitfall to avoid in these mixed-use environments is the accidental movement of biohazard-labeled orange materials in and out of common areas. Because they work with specialized equipment and sensitive chemicals, science lab tenants need a private way to enter and exit their space without bumping into other tenants. This often includes a loading dock, dedicated service elevator and private storage areas. Other pitfalls are ensuring proper HVAC and power installation. Ensuring HVAC infrastructure is separated so that fumes are carefully managed is important for health and comfort. Adequate power, with backups, is also essential for the lab component of a building to be properly supported and therefore not cause outages or other problems in the more standard desktop component.

taylor: Developments aimed at attracting life science tenants should be specific about their target tenants; this is true of any spec office. Identifying a range of target tenants and determining the range of requirements the building will be able to accommodate are key to developing initial pro formas. If the target tenant consists of wet lab uses or has more lab-specific base building requirements, this should be discussed and determined during the initial planning stages. Design can mitigate many pitfalls as long as it is addressed from the start.

Public health researchers have noted a correlation between life science services and transportation. How is this taken into account in the analysis of market opportunities?

taylor: A sense of community is very desirable in the life sciences industry. It is common for lab users to prefer being near hospitals or universities with adjacent uses and talents due to the synergy between the lab and the practical application of science. In Chicago, more broadly, there is an increase in the development of mixed-use campuses that support all aspects of living, working, and playing. We strive to integrate life sciences into these environments to create communities that not only have laboratories, but also medical, educational, residential, entertainment, dining, and more. Being able to combine all of these overlapping human needs and business interests into one district can significantly integrate the life sciences industry in Chicago.

McKinney: Life sciences clusters are innovation districts. According to the Brookings Institution’s definition, innovation districts are “geographic areas where leading institutions and anchor companies cluster and connect with startups, business incubators, and accelerators. They are physically compact, accessible in transit and technically wired, and offer mixed use housing, offices and shops.” Recent trends show that an emerging generation of life sciences companies are flocking to dynamic and geographically compact industrial ecosystems that embrace clustering effects that can amplify the speed and quality of discovery and innovation. These trends, as well as a development’s ability to meet the broader quality of life needs of workers, such as health care, basic services and childcare, are all important factors to consider. account when evaluating a potential site.