Two real estate developers, Taconic Investment Partners and Silverstein Properties, have unveiled plans to bring about 150,000 square feet of new wet lab space online on the West Side of Manhattan, the latest effort in an ongoing quest in New York City to provide startup biotech companies a local home to form and grow.
Taconic and Silverstein have christened a building on West 54th Street and 11th Avenue the “Hudson Research Center” and plan to invest up to $20 million to turn it into a life sciences complex housing a variety of entities—startups, growing biotechs, pharma outposts, and disease foundations. Originally an editing house for Warner Brothers Pictures and known as “The Movie Lab Building,” the facility already houses the new 42,000-square foot headquarters of the nonprofit New York Stem Cell Foundation. Now Taconic and Silverstein plan to outfit the facility for much more than that.
Taconic vice president Matthew Weir says the building currently has 60,000 square feet of vacant space available and another 90,000 that will come online over the next year. Hudson is charging $80 per square foot in rent, “which is very competitive in comparison to the other options for lab-ready space in New York City,” says Steve Purpura, the executive managing partner of Transwestern Consulting Group, a leasing agent associated with the project.
Lack of space has been one of the biggest reasons the city’s scientific ideas have often led to companies that take root elsewhere, like Boston or San Francisco. One by one, however, facilities have been popping up over the past several years that at least give New York institutions and entrepreneurs a chance to spin out companies and start them locally instead.
Two months ago, for example, Alexandria Real Estate Equities (NYSE: ARE) opened LaunchLabs, a biotech incubator, in the Alexandria Center for Life Science near the East River, with 13 startup tenants. Harlem Biopsace in West Harlem has been up and running for a few years now and is meant for the one to two person startup, and SUNY Downstate Medical Center’s incubator and BioBAT in Brooklyn are more geared towards the larger entities that are further along. Johnson & Johnson will open a JLabs incubator in the New York Genome Center next year. City and state initiatives announced over the past year have promised $1.15 billion to biotech in New York, with a portion of those dollars being set aside for incubators and lab space. The city’s biotech plan, called LifeSci NYC, put $5 million into the development of [email protected], an incubator in lower Manhattan that should begin hosting tenants by the end of 2017.
Weir says he’s gotten inbound interest from research institutions looking for incubator space to house their spinout companies, venture firms needing space for their startups, and larger companies either looking to move to New York City or for room to grow there.
“We believe that the success we are going to have with this project is going to change the perception of the demand for life science space in Manhattan,” Purpura says.
That will have to be proven over the next few years. Other tough issues holding back New York’s biotech sector remain, most notably a lack of affordable living space and problems recruiting top level, experienced talent to guide biotech companies. Another issue has been that other than BioBAT, there are no shared-space facilities yet available for biotechs that move on from incubators. The Hudson Research Center does have a chance to change that, however.
“That’s one area in particular where we feel there will be significant demand going forward,” Weir says. “Early-stage companies will graduate, or grow, out of the network of incubators and require lab space of their own. Our project will benefit from this pipeline of demand.”
But will its location be a deterrent? Completely across town, the East Side of Manhattan has academic institutions like Weill Cornell Medical Center, Rockefeller University, and NYU Langone. That’s one of the reasons LifeSci NYC has talked up the idea of creating a linchpin life sciences hub on the East Side. “We understand the hesitancy,” says Purpura, but he counters that a West Side locale is much more convenient for bringing in life sciences veterans from New Jersey, historically the home to a number of large pharmaceutical companies.
“The current activity with early-stage companies is exceptional,” says Purpura. “But if this industry is going to really grow in NYC, it is going to be driven by the pharmaceutical companies that traditionally have been located in New Jersey.”