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up development. According to DeMarco, those upgrades include the use of larger and more sophisticated HVAC equipment, given that research facilities
cannot use recirculated air like an office building would, along with expansive ductwork to support increased airflow. Older office buildings also need a significant upgrade to their electrical service, he added, given the requirements of lab and manufacturing equipment.
DeMarco estimates that MEP work for such a project could amount to more than 50 percent of the overall costs, versus around 30 percent for a traditional ground-up lab facility. That’s not to mention the added focus on structural engineering to support the extra weight of new air handling equipment and other infrastructure.
“All office buildings are not alike, so
it is important to take a good look at it,” he said, noting that floor-to-ceiling heights are also critical. “You’re not going to get away from the mechanical issues because office buildings just don’t have the mechanical equipment to support labs.”
Rock Brook is spearheading
an office-to-lab conversion in Plainsboro, at a former Bristol- Myers Squibb campus on Scudders Mill Road, on behalf of Genmab. That assignment follows a highly acclaimed project in Florham Park, where the firm helped Celularity repurpose a 150,000-square-foot office building as a pharmaceutical manufacturing space, with more likely to come.
That’s not to say that every office building is a suitable match, insiders say. They also caution that, at least for now, most conversions in the state are tenant-driven, given the substantial expense of building
out high-end lab and R&D space. That’s made it tough for New Jersey landlords to justify speculative projects, adding to the supply and demand imbalance in the asset class.
“I would say it’s a growing trend in other markets,” said Jason Benson, a broker and senior vice president with JLL, adding: “It’s now just starting to materialize in New Jersey, due to the increased demand
that we’ve seen in the last 18
to 36 months, as well as the lack of supply. There really has not been any new speculative life sciences development.”
in 2019. Both commitments follow Vision and Rubenstein’s sweeping overhaul of the five-building, 820,000-square-foot campus off Interstate 78, which was punctuated by a new ground-up, high-end amenity center that helped augment its Class A office buildings and existing infrastructure such as an on-site electrical substation.
Stephen Card, a principal at Rubenstein, said those efforts helped the property appeal to a larger user like PTC and stand out from a second-generation,
multitenant pharmaceutical campus.
A team of professionals is now building out PTC’s space at Warren Corporate Center, where it will join Everest Reinsurance Co. after the latter’s 316,000-square-foot lease
delivering the buildings,” Card said. “Obviously, we have to go through the tenant fit-out, but I think it’s rare to find that kind of real estate off the shelf.” RE
Jason Benson
“There’s
not a lot of opportunities to have your own mini
lab campus, especially in the condition that we were
Stephen Card
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