WORCESTER — While there was once little demand for lab space to build the life sciences industry in Worcester, a panel of real estate and life sciences professionals say that the city now has to think about creating more space for a burgeoning industry.
The panel, which focused on how to build a life cluster in Worcester, was part of the Reactory’s 2022 summit at the Beechwood Hotel Wednesday afternoon. The Reactory is a campus dedicated to biomanufacturing located off Belmont Street close to UMass Chan Medical School.
The panelists included James G. Umphrey, principal at Kelleher & Sadowsky; Matthew Zicaro, vice president of real estate development, engineering, and project management at Galaxy Life Sciences; Amy Forman, senior director of real estate services for UMass Chan Medical School and Eduardo Paredes of Leal Therapeutics. Paul Bauer, practice area leader for real estate, finance, and corporate practice at Bowditch & Dewey, moderated the panel.
Bauer kicked the panel off by saying that the ecosystem for life sciences has changed in Worcester over the past decade.
“I remember doing some life science leases on the landlord side maybe 10, 12 years ago and there was a lot of space available,” Bauer said. “I think we’re going to hear today that is definitely not the challenge that we’re facing in today’s market.”
Worcester currently has over 70 life sciences companies ranging from startups to larger businesses, Zicaro said. Along with retaining these companies, Zicaro said that it is important to attract newcomers.
“It’s also important to build world-class facilities to attract these companies and the talent to Worcester,” Zicaro said.
Umphrey said that commercial real estate has several factors, such as the industrial market. In Worcester, there is virtually zero vacancy in industrial real estate space for the life sciences industry. While it is good to have the spaces occupied, Umphrey said that it will be challenging to attract new companies with less available real estate.
“We had to beg companies to come in and take a look in Worcester. It was definitely considered to be in the hinterlands, it was totally disconnected from Boston and Cambridge. And that has changed dramatically,” Umphrey said.
Mustang Bio coming to Worcester is an example of the growing strength in life sciences in the city, Umphrey said.
Paredes, whose company made the decision to move to Worcester, said that Leal Therapeutics wanted to put their location in a place with a fair cost of living, had the expected amenities of a city and access to Boston. Leal decided to have pods around the U.S. in parts of the country that specialized in a certain aspect of their business, Paredes added, and they chose Worcester for biochemical manufacturing.
Worcester also has more space to expand lab space, as opposed to other towns and cities where lab space can be cramped, Paredes said.
Worcester also has workforce as an advantage through the biomanufacturing training programs available in the city, Zicaro said.
Forman said that if a potential tenant comes to tour a UMass Chan building, she tells them about Worcester’s amenities such as restaurants and access to the talent from the medical school.
“What we need is more construction and new buildings so when these companies grow, they have a place to go,” Forman said. “One of the biggest challenges is that the cost of construction in Worcester is not much less, if any, than Boston or Cambridge.”
Umphrey said difference in construction cost in Worcester from Boston or Cambridge is that more nonunion construction companies have lower costs. He added that he believes that for city lab space and biomanufacturing, a tenant will eventually arrive with a willingness to pay for construction. The city’s government and zoning laws are also supportive of development, Umphrey said.
When asked about the future of the biomedical industry in Worcester, Forman said she sees the Reactory being developed to have more space and the planned life sciences space near Polar Park being completed.
“I think it’s more incubator space and then as those tenants grow up and get more funding and there is more space for those companies to move into,” Forman said.