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.
Boston’s Fenway neighborhood has become an “eds and meds” neighborhood and a hub for life science companies. This is due largely to the presence of nine colleges and universities and proximity to the adjacent Longwood Medical and Academic Area, home to 21 medical and academic institutions.
Margulies Perruzzi was retained to retrofit 20 Overland Street in Boston, transforming it from Class B office space into a highly desirable location for a variety of life science tenants. Repositioning the 202,167 SF building for a new and more demanding use required upgrades to its infrastructure to enable demolition of the adjacent building, core and shell upgrades to the first and second floors, and most significantly, a combination of upgrades to and replacement of existing mechanical, electrical, and plumbing systems (MEP) to handle the additional loads imposed by laboratory facilities.
The building had been a vehicle manufacturing plant during World War II, and consequently has substantial floor-to-floor heights, ample fenestration for natural light, and plenty of structural capacity. While beneficial, the latter added a level of difficulty when it came to accommodating penetrations for plumbing. The former factory was also equipped with two large freight elevators, which became irrelevant when the building use changed. The design team repurposed one of the shafts as thoroughfares for routing new chilled water, HVAC exhaust ductwork, and generator conduit runs from the first floor and second floors to the roof instead of running these utilities down the side of the building, which is a more common solution.
Based on the structural capacity of 20 Overland, the roof did not need reinforcement for the additional new HVAC equipment, which included supplemental condensing units for cooling and lab exhaust fans. Dunnage—a structural platform for mechanical equipment—was added to support a new lab emergency power generator. Due to seismic design constraints, diesel fuel to power the generator could not be stored on the roof and instead is stored in a specially-design tank room located in the basement.
Upgrades were also made to the lobbies and entrances at both the Overland and Burlington Street entrances to entice more foot traffic in front of the building and to connect with future public circulation. The improvements have already attracted new tenants: Margulies Perruzzi recently completed a 60,000-square-foot interior fit-out for Strand Therapeutics.
Not every building is suitable for conversion to labs. In this case, strategic discussions with the landlord took place before and during the design process regarding future flexibility, building and fire separations between 20 Overland and 109 Brookline, limitations on lab control areas, maximizing available space for lab use, and implementing renovations while minimizing disruption to existing tenants.
Owners thinking about making a similar investment must consider the prospective building’s adaptability to the new use. Zoning, local codes and ordinances, building location, and site amenities such as ease of circulation, access to public transportation, and available parking are all important factors. From a physical standpoint, buildings that have generous floor-to-floor heights, structural integrity, presence of essential utilities, capacity for enhanced utilities, flexibility to appeal to different types of tenants, and availability of first floor space for chemical storage, are prime candidates for repositioning.
Margulies is an award-winning architect, community leader, real estate industry mentor, and philanthropist who has made a difference in the communities where he lives and works. After serving as Fidelity Investments’ manager of real estate design, Margulies founded Margulies & Associates in 1988. Now known as Margulies Perruzzi (MP), Margulies has grown the firm to one of New England’s top architectural and interior design firms, focusing on workplace, health, science & technology, and real estate development projects. Margulies strongly believes that people are deeply affected both by their workplace and by where they live, and that architects can contribute enormously to making businesses more successful and their employees happier. His clients recognize the value of this expertise, resulting in commissions to design and strategize on many exciting and provocative headquarters projects. Margulies is also involved in a number of volunteer efforts, most notably working on behalf of Boston’s Wharf District Council to develop waterfront resilience to rising sea levels, and on designing and building cost-effective modular micro-units for the homeless.
The well-deserving 2023 winners will be honored at the in-person Awards of Excellence Gala on April 27, 2023 at the Westin Boston Seaport District.
WELL APs have successfully passed the WELL AP exam, an assessment based on the expertise of leading practitioners in the field of design, health, and wellness in the built environment. Developed using GBCI’s rigorous test development best practices, the WELL AP exam is designed to test a candidate’s knowledge and proficiency in building wellness and the principles, practices and applications of the WELL Building Standard.
What was your most important professional accomplishment or most notable project, deal, or transaction in 2022?
Joining Margulies Perruzzi, a firm I’ve admired for many years, as Director of Science Strategy. In this role, I am responsible for lending my expertise to projects, managing and recruiting staff, and developing new client relationships. With an extensive science portfolio, Margulies Perruzzi specializes in life sciences, medical devices, research and development (R&D), and manufacturing projects. Margulies Perruzzi has worked with a wide range of industry leaders, including IQHQ, Strand Therapeutics, Azenta, Avencell, Boston Scientific, and many others. The culture is collaborative, engaging, and fun. I feel very supported by leadership and look forward to 2023.
What emerging trends will drive investment and development in 2023?
The Greater Boston life science and science/technology real estate markets plateaued this year from previous years; however, it’s still an exciting time. Several new lab buildings will be coming online in the next few years, and we are seeing an increased demand for manufacturing and cGMP facilities. Mergers and acquisitions will be prevalent in 2023 as some smaller companies may see the need to join forces with larger established companies.
My focus was on corporate interiors and workplace design before getting involved with our Science & Technology studio. I get to keep the workplace strategy while adding in technical aspects associated with labs. I recently worked on a 50,000 SF space with a 60/40 lab/office split. I had the opportunity to play with lighting and coloring to facilitate wayfinding through the open labs.
It was fun to push the design by creating a connection between lab and office supported by glass walls, allowing a clear visual into the lab from the office, and vice versa.
BOSTON – November 17, 2022 – Margulies Perruzzi (MP), one of New England’s most innovative architectural and interior design firms, announced today that its Founder and Principal, Marc Margulies, FAIA, LEED AP, has been named one of the Power 50: Movement Makers by the Boston Business Journal (BBJ). An annual list of Boston-area businesspeople who are making the biggest impact on the region, this year’s honorees were celebrated at an event on November 16 at Tuscan Kitchen in the Seaport. A special section of the BBJ’s print edition will feature the honorees on November 18.
Marc founded Margulies & Associates in 1988. Now known as Margulies Perruzzi (MP), Marc has grown the firm to one of New England’s top architectural and interior design firms, focusing on workplace, healthcare, science & technology, and real estate projects. MP was ranked #16 on the 2022 list of architectural firms published by the BBJ.
When it comes to shaping the city’s future, Marc’s influence goes beyond building design. He serves as president of the Wharf District Council, a nonprofit made up of businesses and residents on the downtown Boston waterfront. Those property owners represent the front line to address the flooding that’s occurring as climate change worsens. That subjects them to not only great risk, but also greater responsibilities. The actions they take to protect themselves from flooding will help the rest of downtown. Marc is spearheading an initiative among the council’s members on how to join forces to protect the coastline. To this end, they have created a Climate Resilience Task Force and commissioned a study to recommend options ranging from a network of barriers to elevating waterfront properties to hold back rising Boston Harbor waters.
Marc believes passionately in the importance of using his resources, both as an architect and concerned citizen, to create a better community. For many years, Marc’s personal philanthropic focus has been the issue of homelessness in Greater Boston. Marc has been involved for more than 30 years with Heading Home, Inc., one of the Boston area’s largest agencies devoted to helping the homeless. He has served as both volunteer and Board Chair, applying his architectural skills and experience to advance the goal of ending homelessness. Recently, Marc has been working with the Massachusetts Housing & Shelter Alliance to develop modular micro-housing units in the program called “A Place to Live.” Working with a variety of agencies (most notably the South Middlesex Opportunity Council (SMOC) in Worcester), MHSA has advocated for the construction of buildings of 18 to 24 units that are purpose-built for adults who are homeless or at-risk of homelessness.
Marc is a regular speaker at CoreNet, IFMA, CBA, and other industry organizations whose missions include educating those involved in corporate and institutional real estate about important advancements in workplace design. His involvement with these organizations, through speaking and leadership, has focused on elevating the importance of the architect’s voice in conversations that increasingly involve many competing specialists.
Leasing lab space in the metro Boston commercial real estate market – one of the top three in the country for life sciences – can present a journey into the unknown for companies emerging from the incubator stage or any growing company not familiar with the construction process. On any trip into unfamiliar territory, a road map is a requisite tool for helping a traveler steer clear of wrong turns, unexpected hazards, and costly detours. For companies seeking the most ideal space and lease terms for their lab facilities, market knowledge and early programming are the roadmaps to a successful project.
Cresa Boston’s Q2 2022 market report on life sciences juxtaposed low vacancy rates in Cambridge with higher rates between Route 128, the inner suburbs, and Boston. Class A building rents in Boston and Cambridge averaged $100 to $125 per square foot, but lab space is more than twice as expensive to fit out in an existing building than office space. Cresa also advised: “With occupancy delays becoming increasingly common, upfront due diligence on buildings, infrastructure, and the team are critical in staying on schedule and budget.” That’s precisely where lab programming and planning come into play.
Basic Program Information
A commercial real estate broker obtains basic information from prospective tenants to narrow down available options during the site search. This includes location, approximate square footage based on full-time employees, future growth, and desired building infrastructure and amenities. Understanding square footage and amenities are important because although the tenant will only occupy the usable square footage, it is the rentable square footage – a percentage of the property’s common areas – that is used to calculate the lease amount. Many times, lab architects are asked to do preliminary lab layouts or a test fit to validate the client’s space needs and to confirm the client’s overall program and space requirements.
Extending beyond preliminary test fits, lab programming can help determine the client’s needs regarding location within the building, sometimes requiring the lower floor levels of a building, ensuring construction type classification and building infrastructure will meet the client’s needs and comply with all applicable federal, state, and local codes, regulations, and ordinances.
Unique Programming for Lab Space
Planning for lab versus office space is different for a number of reasons, not the least of which is the use and storage of hazardous materials and chemicals. Due to the nature of the work and type of equipment, labs also require increased security and flexible design; place higher demands on HVAC, electrical, plumbing, emergency power, and structural systems; and need generous plenum space for ductwork and piping, requiring higher floor-to-floor heights.
During programming, the lab planner and/or architect will collect and analyze data from the client and specific end users that will not only provide a foundation for the lab layout with respect to square footage, adjacencies, equipment and furniture types and sizes. It will also establish lab and support space standards, identify building system performance criteria, and validate the owner’s existing facilities program strategies.
Timing is Everything
Whether a start-up moving on from incubator space or an established company looking to expand, the time to partner with an experienced lab design professional is as soon as the need for new, more, or different space arises. Identifying the client’s real estate needs is the key to finding the right building and leasing the appropriate type and amount of space necessary to meet their short and long-term business goals.
Total 2021 billings may include international projects in some instances. Mass. architectural billings refers to billings for architectural projects only performed by the firm’s Mass. office(s) for projects in Mass. only. Total 2021 architectural billings refers to billings for all architectural projects performed by the firm, in Mass. and elsewhere.
What advice would you offer to women getting into the CRE industry?
Be a sponge. The biggest mistake I see young designers make is expecting too much responsibility too soon after starting out and listening too little. There is so much to learn from experienced architects and interior designers. This is one reason the field of design is based on apprenticeships. Find veterans of the industry who want to share their knowledge and experience. Practice humility, listen, and of course, work hard. These are the best ways to grow your career.
What trends will dominate your industry in the coming months?
The biggest trend right now is flexibility as it relates to the re-shaping of the office post-pandemic. The hybrid model is still the way of the future, but this concept is still evolving as demand from the workforce increases. The most important thing right now is allowing as much flexibility as possible whether it be through versatile furniture, accessible technology, or even rethinking what the physical office environment what the physical office environment looks like for your company. We are, still, as a workforce learning, adapting, and assessing this new hybrid work environment and for us designers and workplace strategists, it’s an exciting time.
What trends will dominate your industry in the coming months?
The pandemic has altered healthcare design, advancing pre-existing technology to aid the current need. I believe telemedicine will make further advances within the next few months to allow in-house treatment between both physician and the patient. Online video and tele-conferencing have also influenced the healthcare industry, allowing the education of medical staff at all levels while saving time and money.
What has been your biggest challenge and how have you faced it?
Healthcare is constantly evolving, and it is important, as a designer, to evolve with it. Our role as architects and interior designers is to be the bridge between new technology and client needs. It’s imperative to stay up to date with trends and adjust how to plan and design a space to not only fit current needs, but future needs as well.