Andrew J. Sherman – Worcester Real Estate Podcast
A discussion about life sciences activity beyond Kendall Square with Jon Weaver, President & CEO, Massachusetts Biomedical Initiatives, Quentin Hart, Partner, McCord Development, Inc., and Aaron P. Hall, Operations Director, LEFTFIELD, LLC. Discussion moderated by Andrew Sherman, V.P. Kelleher & Sadowsky.
Here are some excerpts from the discussion:
Please tell us about MBI from a commercial real estate perspective.
Jon Weaver: MBI manages about 50,000 square feet of space including our recently completed project at 17 Briden Street in Worcester… This project doubled our space in the City from 25K to 50K square feet. …Since our grand opening of that new facility, we’ve had 17 early-stage companies come in the door, which brought us to about 45% occupancy of that building, and about 75% across our entire [real estate] portfolio.
What is most important to MBI when evaluating sites for your incubator companies?
Jon Weaver: We just went through that process (during the site selection process leading to Biden Street)… (During our strategic planning effort t we really looked at a mix of geography and proximity to other life science facilities. We ended up choosing a building in Worcester’s Gateway Park, close to WPI’s life science bioengineering center, and new medical device center;, and also just down the street from the UMass Medical School.
What are the typical size and space requirements of MBI companies?
Jon Weaver: MBI’s historically had what we called our Startup Centers. And those centers have individual private suites for the earliest-stage founders. So if they wanted to have a closet with a biosafety cabinet to get started, they can do that. And then they can grow over time flexibly to get up to between 600 to about 1,000 square feet. And that’s historically been our model. …From that point they would (most likely) leave and go off to the private sector to carry on from there. But that jump from about 1,000 square feet to 5,0000 to 10,000 square feet is tough…causing them to take a step they weren’t really ready for.
…So what we’ve done in our new facility (at Biden St) with support from the Life Science Center, is build what we call our ScaleUp Center with labs up to about 2,000 square feet, with probably an average one being 1,500 square feet, where companies can take one or two of those labs during kind of kind of “teenage years” – their adolescence – before making the jump out into the private sector. It just makes that transition more sustainable for those companies in those really challenging early years.
Please tell us about McCord Development from a commercial real estate perspective.
Quentin Hart: We are a Houston-based fully-integrated real estate company founded in 1973. We’ve developed approximately 5 million square feet of our own commercial space… We expanded to Boston, approximately a year and a half ago and are excited to recently announce our first investment in that space in Northborough at 30 Bearfoot Road… and, in Houston we’re, the developer of a 4,200-acre commercial business park called Generation Park.
What are some of the key drivers causing a tenant to look for new space?
Quentin Hart: The need for space and growth is very event-driven… They may receive favorable results, or raise some capital, or ultimately get some sort of approval from the FDA or (whatever) oversight organization they have… (at this moment in time) they, need someone to de-risk the real estate aspect for them, and to provide that space.
What are some of the key requirements that your prospective tenants are looking for?
Quentin Hart: A few things… But the number one thing is really whether the space is functionally helpful to what they’re trying to accomplish (with) their science… (With companies at) advanced stages of clinical, or biomanufacturing, we’re really trying to provide a space that’s helpful to their progress and their pipeline… Additionally, talent would be another big thing… thinking about who are the people that are going to help them pursue that research, or make those therapeutics… Finally, (being able to provide) certainty in schedule.
Please tell us about how LEFTFIELD helps tenants with its project management services. How does it work?
Aaron Hall: The first thing we need to understand is the clients program. What does it look like? How’s it going to function in this new space? …One tenant’s program requirements may be a lot different than another tenant’s lab requirements. Some tenant may need just some standard BSL2 entry-level space like Jon needs (with MBI’s start-ups)… or they may need more CGMP-level type space (such as Quentin’s space) at Bearfoot Road… and those two requirements are very different.
…We may look at a potential list of 10 to 15 buildings on behalf of our clients… (To do so) It’s important to know “What level of lab are we doing here? What level of, science are we doing here? Can the building even support that?” …We want to envision how this program is going to function in this new space. Are we building new or are we repositioning an existing building? How’s our client’s program going to function in this new space? Does this space even qualify? Those are quick exercises that we go through to reduce the field of opportunities.
…A landlord may claim a building is lab-ready… but it may not not have a generator. Typically, a building that needs retrofitting or repositioning requires all new mechanical systems to support the labs, because they’re not built for labs to begin with.
Have space requirements changed during the pandemic?
Aaron Hall: We are working with a handful of smaller users right now (who now need more space). Because in order for them to safely develop their science they need to expand into larger areas, so that they can, work in a socially-distanced fashion inside their labs… We’re doing a couple of renovations right now where we’re supporting tenants in multiple different buildings, so that they can work safely and further apart.
Have you seen any slowdown or any uptick in demand for space due to the pandemic?
Jon Weaver: Back in March, we were having some fears that we had perhaps under built… (Prior to the pandemic) We had interest in about 80% of the space in the new building… We did see a- a quick slowdown where I think a lot of people sat on the sideline… and said “maybe this isn’t the time for me to start my company”… but that’s been turning around… (right now) 45% of those people came back. We’re having conversations with an additional group that could bring us to 60% or 70% in that new building by the end of the year. So we’re really bullish on the biotech cluster here in the City.
Should you have any questions about this video – or any commercial real estate matter – please feel free to contact me at [email protected]
or call me at 508-841-6412.