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      How should Life Sciences Real Estate Evolve as the Ambitions of Occupiers Change?

      Just as any researcher or entrepreneur translates an idea from the academic environment to its institutional framework and then to a sustainable, income producing entity – real estate plays a critical role throughout an organization’s entire life cycle. This is especially true for the basic life cycle of a life science company. 

      19 Feb 2022 Doug Cuff, Vice President of UK Real Estate, IQHQ

      There are some basic real estate fundamentals that are for the entire life cycle of a life science company. For instance, most laboratory (e.g., biology or chemistry) space will need robust systems to provide a safe, clean environment for the research staff. Additionally, a strong amenity offering is critical to recruit and retain today’s workforce, which includes, but is not limited to, solid food offerings, health & lifestyle offerings and close proximity to transportation connections. 

      Most organizations have varying pressures put on them throughout the life cycle of their businesses. These pressures typically manifest across four stages of growth and will dictate how these respective organizations approach their real estate needs. 

      Eureka: This is the moment when an academic researcher comes up with an idea that could be translated into a commercial endeavor.

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      Incubation: Academic tech-transfer and enterprise groups help grow ideas and move them into various sorts of incubators.The entrepreneur will have some angel funding and will need a lot of help and support to advance the technology.

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      Scale Up: At this stage, the company has grown and expanded through a couple of rounds of fundraising and has a core group of employees. The company will be a lot more focused on lease terms: rent is important, but term flexibility is still key.

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      SME: At this point, the organization has either gone public, been acquired or merged, and the executive team is committed to investing in the business. Thus, there is more of a willingness to sign longer leases for a lower rent.

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      Maturity: By this stage, control is key. Maturity could be defined by big pharma or biotech. Traditionally, big pharma would mean that a landlord would sign a lease and get out of the way.

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      When assessing the real estate needs of a life science company, it is clear that there is no cookie-cutter approach.

      The stage of the life cycle will dictate the stresses on the business and the ultimate real estate needs of the organization. Additionally, understanding what is going on within each individual market is a critical component to bring a successful project forward. In order to ensure that a real estate development project is successful, it is essential that the negotiator truly understands the pressure on the business based on where it is in the life cycle. The life science market is a dynamic and growing one, so there are tremendous opportunities for developers that can fully anticipate the needs of life science companies across the many different stages of growth.  

       

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