The Trend is Enticing Many, but is it Right for Your Asset?
By Tate Chandler, Project Executive, XL Construction
Design and construction firms are seeing a strong rebound out of the pandemic with growth being driven, in part, by some atypical opportunities. Decreasing occupancy has been a very real issue for office building owners and the catalyst for some developers and property managers to join a growing group of non-traditional thinkers.
One trend gaining traction is the conversion of office buildings into life sciences capable facilities. The life sciences sector has long been a major driving force in the Bay Area economy and its continued growth is spreading out from the traditional South San Francisco and Berkeley/Emeryville hubs. Municipalities such as Alameda, Palo Alto, San Mateo, Foster City, Menlo Park and Hayward are all seeing rising trends in office to lab conversions.
While office design is driven by efficient, enticing workplace environments and amenities, lab design is driven by specialized equipment needs and strict safety requirements. These differences often require the building to be taken back to its cold shell conditions and warmed up. Our general superintendent likens these projects to converting a boat to a plane because of the amount of core/shell modifications required.
To date, conversions have been done to some high-profile office buildings, including Genesis Tower in South San Francisco and Harbor Bay Parkway in Alameda. Following the leasing success of these projects, and with the current availability of office and warehouse real estate, building owners have been quick to find ways to replicate other’s successes.
What’s Involved in Converting Office to Life Sciences Spaces
At the outset, it is important to know that not all buildings are suited for lab conversions. This evaluation should be made with the assistance of a knowledgeable designer and builder to make sure the project can meet safety, building code, operational, and lab equipment needs. When evaluating these buildings, five key elements need to be considered— site constraints, structural requirements, elevator size and capacity, municipal and back-up power and HVAC systems.
A designer and builder will also be charged with remodeling the first floor and adjacent site area of a general use building to suit life sciences tenants’ storage, shipping/receiving and utility needs. These designs require larger trash areas, more space for generators and process utility equipment, as well as access for larger deliveries. We always evaluate multiple options in an effort to minimize the exterior footprint, and it is always the case that some areas outside the building are affected.
Ideal structures for conversion are steel, Type I structures with a large existing equipment footprint on the roof. These provide the fireproofing and structural flexibility desired. We have converted concrete cast in place structures, and they are more limiting in their flexibility as the large openings for new shafts and hoistways require time impacting shoring and cast in place additions. Open web truss roof structures are challenging because they oftentimes cannot support the higher weight requirements stemming from large rooftop systems and hanging utility loads. Truss systems need not be ruled out, but additional costs will be incurred for structural reinforcements such as new columns and footings.
Often the longest path through these conversion schedules and most impactful, especially in an occupied facility, are the elevators. There will need to be at least one cab capable of supporting a 4,500 – 5,000 lb. load and handle 8-foot fume hoods, or bio safety cabinets—which house experiments utilizing hazardous substances, viruses, etc. Depending on the jurisdiction these elevators may be required to transport chemicals without an operator in the cab.
To deal with the greater amount of power a life science tenant requires—it is necessary for these buildings to deliver as much as 30-watts of power per foot throughout the space—owners may need to undergo the costly and lengthy process of upgrading the power of their buildings. Any disruption of electricity to the labs can be catastrophic to sample storage, ongoing experiments or maintenance of pressure requirements which require HVAC systems to run throughout a power outage. To ensure operation can continue through such a shutdown, the facility will need backup generators. These are often provided by the tenant, especially in a single tenant space, and the space allocation and infrastructure is provided by the building owner.
Because office spaces can recirculate air through their air conditioning units, they are able to minimize the size of the heating and cooling equipment needed. Labs on the other hand utilize single pass air, requiring air from the lab space to be removed from the building via large exhaust fans. This mandates larger supply air equipment and, since all of the supply air is filtered outside air, larger heating and cooling systems. This requires the building’s rooftop footprint to expand, potentially requiring the addition or expansion of the roof screen—which also comes with structural costs.
The cost of adding the elements necessary for these conversions can be significant and while the AEC community is always looking for more efficient ways to complete these warm shell conversions, much of the change is prescriptive. The spec TI (tenant improvement) many landlords are building allows for a more flexible offering and we are seeing a wide range of options across the Bay.
Spec Labs Offer Building Owners Flexibility and Cost-Effective Options
Spec labs give prospective tenants a finished lab capable of supporting many of the science community’s basic needs – lab casework, fume hoods, lab sinks and utilities at the ceilings, walls, and casework. This level of completion provides the scientists a move-in ready space, facilitating their ability to expand their research and grow their capabilities. In addition to time savings, the building owner will have the ability to customize the space to best suit the incoming tenant’s needs, should they desire alterations to the spec.
A spec lab has to be flexible enough to receive all manner of equipment or stand ready to accommodate it through expedited build-outs. What constitutes a “finished” spec lab? The answer to this question is evolving as each real estate agent, broker, developer, contractor and designer may have differing views. It may be a completed lab with a full floor plan of casework, power and utilities distributed to the ceilings and lab support areas, house compressed air and vacuum systems, installed and operating generators and multiple hoods and sinks. It may be a space with less than half of the floor plan filled with casework, hoods, and sinks and no house gas systems or backup generators. The level of provision will depend on each landlord’s approach and leasing model.
Spec labs enable construction companies to provide their landlord partners with options that allow for a short period of time from the tenant’s lease signing to the commencement of research activities. It will also require a minimal amount of rework because of misalignment between the spec and a tenant’s specific needs. Reaching a point that allows for permit sign-off, a quick completion of a base spec and/or a cost-effective tenant driven renovation is the final goal. It minimizes waste, gets scientists working and maximizes return for building owners.
Even though the decrease in demand for general use office space was put in motion by the pandemic, our team believes that this trend of converting general offices into venues for life sciences tenants will continue to grow. Building owners who are considering it need to engage and form strong partnerships with architects, builders and trade partners who specialize in this area to best meet their goals and expectations.
About Tate Chandler
Tate Chandler is a project executive at XL Construction, headquartered in Milpitas, California. He has been with the company for more than 15 years, over which time he has specialized in advanced technology and life sciences projects throughout the Bay Area. He is a USGBC LEED Accredited Professional. Major projects he has contributed to include the DBIA award-winning Bayer CropScience project in West Sacramento, Genesis Tower in South San Francisco and Harbor Bay Parkway in Alameda. He has also worked on projects for Genentech, Amgen, Exelixis, Johnson & Johnson, ARE and Phase 3.