Life Sciences: Construction in the City vs. Suburbs

March 30, 2022

Life sciences has been the most promising commercial real estate vertical in the Philadelphia region for a little while now. It continues to experience growth as companies from all over the world are starting to find the Greater Philadelphia market attractive due to our talent pool and location… but should companies choose to locate their facilities in the city or suburbs? Many times, it will depend on project costs and/or the availability of lab space.

University City, home to world-class research hospitals and a growing number of cell and gene therapy companies, is an especially attractive spot due to the proximity to the airport, accessibility to many public transportation options, and the continual growth of the residential and entertainment markets. With lab space at a very low vacancy rate, many city developers and landlords are actively considering renovating typical office buildings into labs, which does not allow for a straightforward solution. When renovating high-rise buildings, floor-to-ceiling heights, MEP overhauls, and structural modifications can be both challenging and costly. As a result, when possible, developers and landlords also look to build out of the ground.

On the other hand, the suburban market offers a less costly solution from a labor perspective but certainly still has the same design and construction challenges. The main advantage of the suburban areas for life science companies is the ability for more out-of-the-ground opportunities due to the availability of more land.

Boston and European life science companies will continue to move or open locations within the Greater Philadelphia market due to the favorable rental rates, lower construction costs, and the excellent talent pool for the foreseeable future. The Philadelphia area is a great place for companies to recruit talent from universities such as Drexel, UPenn, PCOM, St. Joseph’s, Villanova, Penn State, and Temple. These factors will drive developers and landlords to continue investing, updating, and building new spaces to handle the ongoing demand in both the city and suburban markets.



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