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Highlighting trends in the life sciences asset class at PERE’s America Forum in New York City

Life Science
  • 30 Nov 2023
  • by
  • Isabel Sepkowitz
  • Senior Corporate Communications Manager
Mark Biancucci, CFO, Lendlease Americas, joined Jonathan Pearce, Head, Investments, Office and Life Sciences, United States, Ivanhoé Cambridge, and panel moderator Samantha Rowan, Editor of Real Estate Capital USA, to discuss key trends impacting the life sciences asset class, from demand to design trends to capital deployment.

At the PERE panel “New Life for Life Sciences,” Biancucci and Pearce discussed how over the pandemic there was a surge in demand for the life sciences asset class, which led to record levels of expansion. In the current market, both panelists noted that the asset class is still strong but stabilizing. 

To better understand the demand for this asset class, Biancucci and Pearce described that it is essential to follow capital and industry trends. They noted there is dry power on the sidelines waiting to be deployed, and the life sciences asset class remains attractive for investment due to continued innovation in the industry.

“As these advanced life science industries, particularly in the cell, gene and drug therapy sectors, continue to receive venture funding, we will see this investment drive the demand for new labs and buildings catered to the needs of these innovative companies,” said Biancucci.

Besides capital, location is equally important to understanding the current demand for the life sciences asset class. Both panelists discussed how Boston, South San Francisco and San Diego remain the top-tier locations for life sciences development with strong demand in the second-tier markets. Biancucci noted our consistent activity in these secondary markets, specifically in New Jersey and the greater Philadelphia area, where our construction business continues building new lab, R&D, manufacturing and office space for life science industry leaders.

When asked about how the Lendlease/Ivanhoé Cambridge investment partnership came together at our FORUM development in Boston, both Biancucci and Pearce described how the firms complement each other, bringing together Ivanhoé Cambridge’s world-class investment expertise with our experience operating across the life sciences sector. With many developers entering the asset class during the pandemic, our proven track record in life sciences, with 18 million square feet built in the U.S., demonstrated our sector expertise, which was influential in establishing the partnership.

“Interest alignment is crucial, and the Lendlease/Ivanhoé Cambridge partnership works well because we share similar perspectives operationally, financially, and relative to risk, with both our businesses working towards achieving aggressive sustainability goals,” noted Pearce. 

Biancucci and Pearce also described the similarities and differences between life sciences and traditional office workplaces.

One trend they are seeing across both asset classes is a flight to quality, which includes incorporating first-class amenities in the workplace to newly constructed and renovated buildings. Today’s life sciences developments are now being designed to include everything from shared lounges and cafes to fitness centers and even pickleball courts.

For example, at FORUM, we are designing market-leading amenities to create a workplace experience that is valued by today’s life sciences workers. To enhance collaboration and engagement, FORUM will feature a communal kitchen and eating area, as well as a 7,000-square-foot outdoor terrace with cabanas, seating areas and grilling stations. Along with these tenant-exclusive offerings, FORUM will also offer publicly accessible spaces on the first floor for the community, including a café and art gallery.

Unlike traditional office space, the life sciences sector is less impacted by the current remote work trends as tenants need to be in the lab and office to conduct job responsibilities.

“For life sciences tenants, there is a need to be in person to use the specialized lab and manufacturing equipment required for their job,” Biancucci said. “Essentially, it is harder to conduct cutting-edge scientific innovation from home. Therefore, we are seeing remote work trends affecting the life sciences sector less than traditional office buildings.”

Biancucci also emphasized the importance of flexibility when designing and building life sciences facilities for our third-party clients and future tenants. While traditional lab space for R&D work is still needed, multimodal facilities that are highly adaptable and configurable during various phases of the manufacturing process enable companies to adjust their operations without relocating, which aids in employee retention and allows them to focus on their business rather than on real estate. 

The life sciences asset class will continue to evolve as innovation in the industry continues to drive demand for space and impacts how new facilities are designed, built and operated. To succeed, developers must give tenants what they want today while anticipating how those needs might change in the not-so-distant future.

To learn more about our life science business, click here.

Life Science