CRE Meets STEM: Tech Tenants and Lab Development

Recent accelerating growth in the life science industry is paving the way for an increasing number of US science and tech start-ups. US biotech research employment increased 20% faster than overall employment between 2013 and 2016, with a record $20 billion in venture capital invested in life science start-ups in 2017. With such rapid growth, demand for suitable laboratory space has never been higher.


The surge in desirability of lab-ready spaces is not limited to the top tech markets. Many metro areas are seeing an increase in demand for lab spaces, making this market sector one of the fastest growing in 2019. But what makes a lab space so appealing that it starts a tenant tug-of-war?


Read ahead to learn how you can capitalize on the life science industry boom.


What Do Companies Look for in a Lab?

Customizing an existing space or building a ground-up laboratory both require an understanding of what features potential occupants find necessary and desirable.


Safety First

Much of the work that goes on in a lab may pose special risks such as those associated with biohazard exposure or flammable materials. Laboratory tenants want to work with brokers and landlords who understand the non-negotiable safety measures needed to ensure operations go smoothly and meet local regulations. Fitting out a lab can be costly, but tenants will heavily weigh whether a property is regulation-ready when deciding on a laboratory space. Not only is safety of particular concern due to the experimental nature of laboratory work, but companies also have massive amounts of capital tied up in their research projects and cannot afford to have setbacks or regulatory code breaches impacting operations.


Don’t Skimp on Security

Safety and security often go hand-in-hand but serve different functions when it comes to leasing lab spaces. While safety is essential to protecting people, security protects product. Keeping out people who are not cleared to enter and maintaining confidentiality within the lab protects against intellectual property theft, something that can cost life science companies millions of dollars. At a minimum, badged entry and exterior fencing are non-negotiable, and innovations such as facial and voice recognition technologies make laboratories that much more impermeable to potential intruders. Camera systems can be installed for tenants to manage or additional security personnel can be provided by property managers as an amenity. Tenants may also look for data protection as part of overall security measures.


Be Adaptable

Some life science tenants need to relocate within a short period of time, as their product becomes viable from incubator start-up to hatchling biotech company. As such, there is great demand for spaces that are move-in ready. While some tenants may have more time to work with and be willing to prepare the space in part as a tenant improvement project, it is more likely that lab owner/operators will need to have a space fitted and prepared for tenants. The good news is that there is plenty of demand once a space is ready. Creating a space that can adapt to accommodate a range of possible life science tenants puts CRE professionals in an ideal position to attract these companies and secure immediate occupancy. This adaptability can manifest in the form of features that include higher ceilings, a maximized power capacity with a full array of back-up generators, state-of-the-art ventilation systems, and air purification.



Young professionals increasingly pursue STEM careers, and the life science industry is rapidly growing as a result. In the booming tech markets—San Francisco and Boston—the features that make these spaces stand-outs are increasingly sought after by tenants looking to expand their reach and capabilities as technology continues to advance. This expansion will eventually reach new metros as demand far outweighs available supply, providing an opportunity to CRE professionals who are prepared for it.



To learn more about alternative office assets, check out Medical Office Buildings: 5 Key Considerations for CRE Sponsors