California’s wealth of top research
institutions and the talent they
attract have given rise to scores of companies whose names have morphed
into household words in just a few years.
In the life sciences and biotech industries, upstarts of a decade ago are now
industry leaders, having cracked through
a once-lofty barrier through product
innovation, strong management skills
and the backing of venture capitalists.
Unlike tech firms that moved from
basement bedrooms and garages into
high-rises, these scientific firms have
less flexibility housing their operations.
Zoning ordinances, community sentiment, plumbing, electrical and other
infrastructure issues all influence where
they can establish business. Because of
their unique needs and the occasional
obstructions that towns and cities may
place in their paths, setting up shop can
be harder for them. Needed are the skills
of a seasoned commercial real estate pro
if firms in these sectors are to take their
business concepts and turn them into
reality.
Smart Business spoke with Jonti
Bacharach, vice president at CRESA
Partners Orange County, a real estate
advisory firm that represents tenants
and space users, about the value that
professionals bring to the “house-hunting” process for life sciences and biotech
companies.
Why can’t life sciences and biotech companies just move into a high-rise or other
available office space?
At the most basic level, life sciences
companies do not consider high rises an
option because their occupancy costs
are so high. Also, because these are
rather traditional office environments, a
landlord likely will not allow them —
because of unique space needs — to
operate there.
Life sciences and biotech firms almost
always require a significant build-out of
raw space. Their biggest cost arises in
constructing labs within an existing
space. Here we need to adequately
manage significant reconfiguration of
standard building construction systems
to accommodate the demands, unique
to biotech/lab operations. Service or
consulting firms, which typically occupy high rises, almost never face these
challenges.
Because biotech companies work with
material that area residents could feel
would have an adverse effect on the
environment, they must be housed in a
community that accepts the nature of
their work. Landlords, other tenants and
civic leaders must be supportive of their
business.
A good adviser can also point out the
many benefits these firms bring to the
community, including higher tax rolls
and the prestige they have garnered as
they sit on the cutting edge of their
industries. A skilled real estate adviser
and systems specialist can provide
insight and leadership that will result in many hundreds of thousands of dollars
in savings to the organization.
How do you find life sciences companies
the structure they need?
It’s very rare for a life sciences company to move into a building without making some modifications. Generally, we’re
looking at a ‘box,’ such as a warehouse
or a flex building, which is a structure
designed to accommodate businesses as
disparate as light manufacturing companies and wet labs.
Several factors must be taken into consideration when determining the optimum facility solution, including geographical parameters of the requirement. Does the company need to be
close to airports, research institutions or
hospitals? Cost is always a consideration, as well as zoning restrictions and
waste disposal, among myriad other
issues.
How can life sciences companies reconfigure raw space?
First by asking the right questions, illuminating unforeseen cost considerations, and then creating a strategic plan
designed to effectively address each
issue. Most such companies have unique
operational requirements that must be
addressed in the context of their specific business. Our approach is to provide a
broad base of highly specialized senior
level specialists who will oversee and
manage this process in order to reduce
facility and operational-related expenses, while also ensuring that maximum
efficiencies are realized. This also
ensures that the project will come in on
time — and, often, under budget.
JONTI BACHARACH is vice president in the Newport Beach
offices of CRESA Partners. Reach him at (949) 706-6600 or at
[email protected].
