By Steve Adams, Banker & Tradesman
Kerrie Julian has enjoyed an up-close perspective on Greater Boston’s powerful life science expansion over the past two decades, advising industry leaders including Biogen, Pfizer and Moderna as an architect at leading local firms. Last June, Julian was named director of science strategy at Margulies Perruzzi, a role that includes project management, staff recruitment and finding new clients. A Wentworth Institute of Technology graduate, Julian’s career has included stints at SMMA, Gensler and Perkins + Will.
Q: With the continuing surge in subleasing activity in Greater Boston’s lab market, what do life science companies looking at those spaces need to know?
A: Some tenants have said: ‘Let me get more space than I really need,’ and sublease it, so we’ve run into that a couple of times. That tenant has to understand there’s a control area, and by code you’re only allowed so many chemicals and the higher you go in a building, the less you can have. Do you share the control area between the two companies? Suddenly, if your science is successful and your growth is faster than you thought, you can’t kick out the subtenant. It’s an interesting dynamic. There are lots of spaces available, but you have to be aware you’re partnering with the right company, subleasing to the right company and that your growth projections are in the right spot for you to do that.
Q: Are you still seeing substantial activity by life science developers for spec suite buildouts, and what are the unique design requirements
A: The spec suites are really geared toward the landlords and developers helping get that tenant on board with minimum construction and design costs. Spec suites are really successful when the base building has an ability to tie into lab infrastructure. Flexibility is another thing, and power requirements. A lot have similar components, such as a tissue culture room. There are a lot of similarities, but there are specific processes they run, so it can become specialized.
Q: Based upon inquiries to your firm, how does lab demand compare to early 2022?
A: It’s an interesting time. There are a lot of lab buildings that are under way, and space that will come online in 2023 and early 2024. It’s really a tenant’s market. It might mean that somebody in an incubator might come out earlier if they have the right deal. It’s great potential for those smaller companies. When there were low vacancy rates, folks were starting to move into the Watertowns and Walthams. Now that space will be coming online in the Boston and Cambridge area, it’ll be on the side of the tenants for better rates and maybe better leasing options.
Q: Is the office-to-lab conversion market drying up?
A: There’s not as much this year, or even in the last six to eight months, as there was during 2021. Not everything can be a lab building. Maybe you can, but the cost is going to be astronomical and your return on investment is going to be so long, landlords aren’t opting to do that. You have to put enough into it to make sure it can work, such as different loading zones to get equipment in and out. One of the architect’s first jobs is to make sure people can get out of the building safely. In a lab building, it’s particularly critical. You have to be careful with the ratings of the floor slab, and making sure the fire won’t creep up into the next space.
Q: Is biomanufacturing demand more stable than R&D space in the current financial market?
A: It is huge. A lot of the manufacturing is coming into Massachusetts for several reasons. We are not going to outsource this to other countries. It needs to be closer to the R&D facilities. They are ready to start making those drugs and you need the land and space, so you’re coming out into the Route 128 and[Interstate] 495 belts to support that large-scale, 100,000- to 150,000-square-foot facility. These industrial properties are either going to become an Amazon distribution center or cGMP for biomanufacturing.
Q: How significant are the changes to lab design under new state and local decarbonization regulations?
A: We have the new edition of the Massachusetts building code coming out, with a higher energy code than previously, and it’s something we’re anticipating being released this summer now that the new administration is on board. With that, there will be some updates. We are doing the best we can, but even with some of the advances in clean energy, they still have a huge draw and need for electricity.
Julian’s Five Favorite Bands:
- Pearl Jam
- The Cure
- Lord Huron