Biotechnology companies require specialized facilities, specifically laboratory space.
This can be a major challenge for young, but growing businesses. Not only is lab space more expensive per square foot than many other types of commercial space, it is also much rarer.
How do growing biotech companies find lab space? First, it’s a good idea to understand the technical specifications that a building needs to meet in order to house a lab. With that knowledge in hand, you can then choose to work with a broker or find space on your own (there are pros and cons to each). Finally, it’s almost impossible to find a space that is completely move-in ready for a growing biotech company, so an understanding of how to pick the right service providers can help to make sure you don’t spend more money than you need to on the build-out.
If you are already working in a lab space and planning to move because you need more room, determining how much more you need is relatively easy -- at least in terms of immediate needs. It can be much harder to tell how much space you’ll need in 2 years. If you’re looking at leasing your own lab or buying a building, you definitely need to think about how much space you will need even 5 or 10 years from now. Most commercial leases are for a minimum of 5 years at a time. If you decide to buy a building, you’re looking for a more permanent home for your company and will be automatically going for the higher end of square footage.
Determining the amount of space depends on the expected equipment, workflow, and number of employees. One benchmark for biotechnology labs puts the square footage per person at anywhere between 200 and 400 square feet. (This same resource also discusses lab space design for architects, which may assist you in communicating your needs to them when designing your lab buildout--though note that the regulations are specific to San Diego.) This formula can help you decide how much space you may need when you have a certain number of employees, but it can’t help you predict how many years it will take to reach that number.
There are a few different methods for deciding how much space to acquire now. One method is to just get the amount you currently need, or foresee needing in the next year or two. When you outgrow the space, the company rents an additional lab to expand into. The advantage is your young/small company isn’t spending more per month than necessary. The drawback is that you may not find another lab space very close to your first one, or splitting up the team may be detrimental.
Another option is to look for the most space you would reasonably expect to need within the next five years. Though more expensive in the short term, this would mean only building out the lab once, keeping your team together, and not running out of room. Also, some biotech companies with extra space sublet to startups, which helps to strengthen the local life sciences ecosystem (and helps to offset costs).
Finally, you can land somewhere in the middle and go for a space that will certainly get you through the next couple of years but might be a squeeze as time goes on. You can choose to outsource an experiment that you don’t have space to bring in equipment for, and have some employees come in in shifts.
None of these methods are future-proof. Your choice depends on what type of problem you prefer to deal with, whether it’s having to split up your team, sublet space, or find creative ways to use a space that’s too small. Also, keep in mind that moving labs is expensive and disruptive.
The answer to this question will depend mostly on the needs of the biotech company, but they fall into a few general categories:
1. The electrical requirements for a biotech company depend mainly on the equipment the company plans to use. Large pieces such as ultralow freezers will tend to pull a large amount of amperage, as cooling air to -80C from about 25C requires quite a bit of work. In general, any piece of equipment that has a heating or cooling element will require relatively more electricity. The best way to determine the electrical requirements for a lab are to list all of the equipment in a spreadsheet and note the voltage and current requirements. These can be found in the equipment manual or on the back of the machine. The electricity needed for lights and heating/cooling will depend on the types of systems and their expected hours of operation. In a lab setting, personnel are frequently working beyond normal “office hours” and temperatures may need to stay within a certain range all the time rather than just when people are on site.
All of these factors will add up to the amount of amperage your facility will need, and it is always smart to expect that you will add equipment, require more cooling than expected, and have the lights on longer. Make sure to have access to more electricity than you think you need. You can apply to the local jurisdiction to have additional power for a building, but the process can be long and difficult. It is generally only worthwhile if your company plans to remain at that site for a significant period.
1.a. Backup power is a sub-category of electrical requirements, but it is important if you have irreplaceable samples or expensive reagents that require cold storage. Few buildings have a backup generator and even fewer also fulfill the needs of a lab. However, it’s still something to look for. If you don’t have a backup generator, other solutions include paying for protected off-site sample storage, buying uninterrupted power sources (though these don’t last long), and potentially using Tesla power walls.
2. Plumbing can be changed during tenant improvements, but it is an expensive change to make. The copper pipes that are used are quite costly, so the more access points that you have near the areas where you will need water, the better. This is especially true if the building you’re looking at has concrete floors. Concrete can be a wonderful lab flooring, but if you need to run new pipes or dig drains, that means a fair amount of time and work to dig channels.
3. Heating, Ventilation, and Air Conditioning, or HVAC for short, is especially important in a laboratory setting. The density of particles in the air affects not only the ISO rating of a lab, but also the success or failure of experiments. It’s difficult to do pre-clinical research and development in a lab where the air is not well filtered, as it can allow bacteria, fungal spores, and human skin cells to float around and land in open tubes and plates.
HVAC systems must have sufficient power to cool rooms filled with heat-producing equipment. Whether each room in the lab needs to have positive or negative air pressure is also a consideration. When doing cell culture work it’s generally best to have positive air pressure to help keep contaminants out of the room. However, labs dealing with even biosafety level 1 materials should be negatively pressured if they open onto office or other non-lab areas.
If you’re looking to lease space, it’s important to understand how the HVAC in the building works. Is it centrally controlled such that the landlord will set the times when it can run? Often, landlords for office space will restrict HVAC to only run during normal business hours. However, you don’t want your freezer compressors to have to run constantly all summer because that will significantly shorten the life of the unit.
Note: If you’re building a lab where products will be manufactured under good manufacturing practices (GMP), that adds a whole other set of considerations. The information listed here is for research and development labs. Please talk to a specialist if you’re developing GMP space.
4. Zoning laws determine what types of residents may occupy buildings. Safety is a major reason for zoning areas differently. For example, some kinds of manufacturing plants might produce fumes that are harmful to people over time, so manufacturing zones are generally placed away from homes. Zoning regulations vary by city, but usually laboratories are considered to be “light manufacturing.” It’s a good idea to understand the zoning laws in the cities you are looking spaces in. If you find a space that is close to ideal for your purposes except for the zoning, you may be able to get it changed. Most cities have an application process; for example the city of Irvine, CA’s zone change information can be found here.
The terms real estate agent, real estate broker, and realtor all mean slightly different things, but for the purposes of this blog we will talk about brokers.
The job of a real estate broker is to find the right space for their client. They don’t get paid unless a lease is signed or a sale is made. Furthermore, it’s the seller/lessee that pays them the commission in a commercial real estate deal, so there isn’t any additional cost to the buyer/lessor. In some cases, the broker that is representing the seller/lessee can also represent the buyer/lessor, but experts generally recommend not using this method. Because the seller/lessee is the one who is paying the broker, that’s whose interests the broker is going to protect. However, be aware that even brokers who represent the lessee/buyer are going to promote properties where they stand to receive a higher commission.
That said, it is still highly valuable to work with a broker. They save you the time and effort of searching for properties, talking to landlords, and negotiating. They can walk you through the paperwork of a lease or sale and make sure that all the details are taken care of. Working with a broker can be highly beneficial if you know what to expect going in.
When looking for a broker, there are many real estate brokerage firms that deal in all types of commercial real estate, including laboratories. However, individual brokers who truly understand laboratory space may be harder to find. If you want to make sure the broker you are talking to is well-versed in labs, ask them what types of lab spaces they have helped previous clients with. They should be able to describe some of the differences between what those clients needed. If you are ok with your broker having less prior experience with labs, you can provide them with specifications based on the previous section, “What makes a building suitable for lab space?” Regardless of your broker’s level of lab-specific knowledge, you should expect to have to educate them somewhat. In return, they’ll tell you what is reasonable to expect in terms of properties.
When you tour potential lab spaces, keep in mind that no lab is going to be ready-made to your specifications, with furniture, flooring, or even walls in the right places. It requires a good imagination to see what a space could look like when completed. (It also requires a well thought-out budget, but that’s a topic for a future article.)
Prioritize your list of needs when touring spaces and consider what can be changed. If, for example you need additional HVAC capacity, make sure that there is space above the ceiling or on the roof for another unit, and that the landlord would allow it to be added. A landlord that grants you flexibility in improving the space can be an important asset. However, remember that if you are leasing, all the money you spend on renovations cannot be recouped. The best situation is to find a space that checks the most important/expensive boxes and mainly needs to be furnished.
Finding laboratory space for your company to grow into is a rewarding challenge. If you are taking this important step, best wishes on your future growth!
For more reading about lab space: