The New York based real estate developers Taconic Investment Partners and Silverstein Properties are investing in excess of $20 million for the facelift of the 326,861 square feet Movie Lab building in Midtown Manhattan for Life Science research purpose, writes John Caulfield, Senior Editor of bdcnetwork.com.
Citing the New York Post reports, Caulfield writes that the Stem Cell Foundation has taken 42,100 square feet space as a lease in this building since 2015. A whopping 150,000 square feet area on the top floors of this 10-storey sky-scraper is being refurbished to woo more life science tenants, he writes. What is more, it is reported that the building name is also undergoing a change to the Hudson Research Center.
The lab, being marketed by Transwestern for the developers, has come up with a special report, projecting New York City as an emerging life sciences hub, where on the one hand, space has become a big constraint and on the other hand development opportunities are proliferating too.
Life Sciences Hub
Home to eleven humungous academic medical centers including Weill Cornell Medical College and Albert Einstein College of Medicine, New York has already established as a major destination in the life sciences segment. In addition to that, the city also boasts of having three of the country’s major hospitals and five of the top 50 medical schools, citing the US News and World Report’s latest report card, Caulfield write.
In the education sector, there are eleven major academic medical research institutions and 3,449 advanced Life Science degrees awarded annually and New York is the number one metro in the US. The National Institutes of Health (NIH) funding in 2016 stood at $1.4 billion and New York is the second in the US. As far as the employment generation is concerned, there are 91,097 pharmaceutical, research and development employees in the New York metro area and 39% more concentrated in Life Science employment than the US average. Compared to the top ten markets, New York metro has 20% market share, as the city is already a leader in life sciences employment. Also, the city is one of the country’s highest concentrations of life-science employees, accounting for one-fifth of the total employment in this sector within the top ten life science markets.
Paucity of Space
The paucity of lab space is the biggest concern area, writes the author. According to the Transwestern estimates, almost 100% of the city’s 1.7 million square feet of existing life science and research space is occupied. And until recently, New York’s zoning restrictions made it really cumbersome for life science players to build lab space within manufacturing districts—M Zones—that restrict chemical compounding and packaging, the creation of pharmaceutical products and medical appliances, laboratories, research, experimental and testing facilities, Caulfield writes. Despite that, over the past year or so, the market regulatory changes have made development more congenial for lab science expansion, notes the report.
Citing the recent lease transactions, the report said that it included 49,143 square feet at 10 Hudson Yards for Intercept Pharmaceuticals, 30,000 square feet at 101 Avenue of the Americas for JLABS (division of J&J Innovations), 19,645 square feet at 100 Wall Street for Integra Partners, 11,865 square feet at 600 Third Avenue for Turing Pharmaceuticals, and 11,537 square feet at 25 West 45th Street for Crossover Health, he wrote.
Stating that more investment capital and funding are flowing into the city for this sector, he went on to write that out of the $31.3 billion in NIH funding awarded nationally in 2016, the New York metro area received $2.7 billion in NIH grants. New York City alone was awarded $1.4 billion, ranking it the second-highest funded city in the country, the report pointed out.
State-funded Life Science Initiative
In December 2016, New York Governor Andrew Cuomo launched a state-funded life science initiative that includes $250 million in tax incentives for new and existing life science organizations, $200 million in state capital grants to further support investment in wet-lab and innovation space, $100 million in investment capital for early stage life science initiatives, and a state match of at least $100 million for operating support from private sector partnerships.
New York City Mayor Bill DiBlasio also has launched a program called LifeSci NYC, which will include a $100 million investment to create a new applied life science campus, $50 million to expand a network of life science R&D facilities, $10 million to expand the network of incubators, $20 million a year in matching funds to support early-stage businesses, and $300 million in tax incentives for commercial lab space.
On the zoning front, in December last year the Departments of Buildings (DOB) and City Planning (DCP), and the Economic Development Corporation (EDC) issued a clarification memo updating their interpretation of the zoning in the several commercial districts. The city agencies and the EDC say Transwestern, “broadened their understanding of the current user group 9A zoning to also include the “synthesis and manipulation of chemical substances, biological matter, and animal models … [that] are integral activities in commercial medical laboratories devoted to research and testing.”
Of late, new research and lab spaces are opening up in a big way. For instance, the Cornell Tech campus on New York City’s Roosevelt Island just opened its first phase. Furthermore, the 1.17-million-square feet Building 77 at the Brooklyn Navy Yard is undergoing a $185 million facelift that could attract more lab players, Caulfield concludes.