2021 Philadelphia Real Estate Roundup BioBuzz

In 2021, Philadelphia’s Cellicon Valley continued to prove why it is a promising hub for life sciences and biotechnology. Current reports indicate that the city received $1.23 billion in funding from the National Institute of Health (NIH) in 2021 — and that number is expected to be larger once finalized, said Lauren Gilchrist, chief research officer at Longfellow Real Estate Partners.

“Philadelphia specifically has significant volumes of new investment from both [private capital and NIH funding], specifically for cell and gene therapy,” Gilchrist added.

There are plenty of other reasons to love the city: its low cost of living, robust public transit system, and proximity to academic institutions like the University of Pennsylvania and Drexel University.

But the challenge is to meet the demand created by a perfect storm: from fast-track FDA approvals, to raising capital in cell and gene therapy, to the COVID-19 pandemic, Audrey said. Greenberg, co-founder and executive director Director of the Center for Breakthrough Medicines.

“There are a lot of things happening online, and the Navy Yard is particularly on fire. But that’s still not enough,” Greenberg said.

Here’s a look at some of the players who have done much-needed projects in the region in 2021 and what kind of space Philadelphia still needs.

Conversions

Many developers are making the decision to convert old buildings into life science labs and manufacturing space, especially as more companies come to market in the wake of the real estate crash. commercial induced by COVID.

“A lot of the original customers have either left or terminated their leases,” said Pete Matson, vice president of business development at DPS Group. “And so a lot of developers and real estate people were trying to reuse those buildings.”

After this past year, it’s safe to say that the City of Brotherly Love is no stranger to conversion projects. But this has not always been the case.

“Before last year, there were really no successful conversions. What has been shown is that the right developer with the right commitment and the right bones in their buildings can achieve successful conversions in Philadelphia,” said Joe Fetterman, executive vice president of Colliers, “And that the market will move 20 to 25 blocks away from college town to take up space.”

The Curti

The Curtis is one of the most successful life science conversions in Philadelphia. Located in the town centre, this former publishing company site now has extensive wet lab space following a conversion by Keystone Property Group. In August, Keystone leased two spaces in the building, adding Aro Biotherapeutics and a listed company to its charter. Other tenants include IMVAX and Vivodyne.

Innovation 800

In late 2021, Discovery Labs acquired the former Philadelphia Inquirer printing press, which has 857,000 square feet of space not far from the company’s current digs at Innovation 411 and Innovation Renaissance.

“We are currently working on emptying it and removing the old printing presses,” Greenberg said. “It truly is a perfect building for life science conversion as it has the floor loading capacity, ideal ceiling height, electrical and utilities, and transportation capabilities.”

Campus Budd

The former Budd plant, where metal fabrication and auto body stamping once took place, will soon become a bio-manufacturing center thanks to a partnership between the Plymouth Group and Centerbridge Partners, LP

With 2.4 million square feet of space, the building will house Budd Bioworks, occupying 300,000 square feet of GMP manufacturing space and 150,000 of laboratory and office space. This life sciences center will anchor the rest of the campus, which will include retail, residential and dining spaces.

Graduation area

Graduation space is another high-demand area in Philadelphia. These spaces are larger than incubators, which typically house small start-ups, but smaller than large labs, offices, and manufacturing spaces for well-established businesses with significant capital.

“We currently have the incubators and full commercial spaces, but we need a little more of that space in between,” Gilchrist said.

These spaces also provide shared amenities for their tenants – a major benefit so businesses don’t have to spend valuable capital buying expensive equipment up-front.

“I think one of the things these graduate companies are going to be looking for is not just more space, but also a vendor that can give them additional benefits and conveniences,” Fetterman said.

B.Labs

Officially open for 2022, Brandywine’s B.Labs at the Pennsylvania Biotechnology Center offers 50,000 square feet of life science incubator space. The space also provides shared amenities, resources, and expertise to its customers. These spaces are suitable for both start-ups and those looking to graduate from a smaller lab.

Manufacturing space, CDMO and flexible space

A year ago, Fetterman said looking for manufacturing space in Philadelphia was like looking for a needle in a haystack. Most of the available spaces were more like flex warehouses than anything else and were often not very well located.

“As we speak today, there is one and a quarter million square feet of available manufacturing space in various stages of development or redevelopment in Philadelphia,” Fetterman said.

Center for Breakthrough Medicines and Discovery Labs

CDMOs fill some of these available places. One of Philadelphia’s most successful is the Center for Breakthrough Medicines, which operates out of Discovery Labs. Currently occupying 100,000 square feet, they are looking to expand further in the near future.

“We will have a total footprint at the Discovery Labs site of 700,000 square feet, which is one of the largest single-site cell and gene therapy manufacturing CDMOs in the world,” Greenberg said. “It’s really exciting for Philly to have this recognition.”

Greenberg shared that the company is building a GMP manufacturing space that will include the production of viral vectors, cell processing, plasma and DNA. The space will also support processing development, analytical development and testing, in addition to hosting laboratory space and warehouse space.

“We have a complete end-to-end CDMO offering, which is really unique,” ​​said Greenberg.

Greenberg added that there is a huge demand for GMP manufacturing space in Philadelphia, especially for small batches of therapeutics that will be used for clinical testing. In the past, many CDMOs have not been able to handle this capacity on a small scale, but the Center for Breakthrough Medicines is uniquely designed to take on this task.

Discovery Laboratories

The Center for Breakthrough Medicine’s parent company, Discovery Labs, also had a big year, starting with the signing of a 150,000 square foot deal with the University of Pennsylvania.

They also signed a 20,000 square foot lease with NeuExcell. The new space will allow NeuExcell to expand its research and development operations in addition to supporting discovery research, from exploring preclinical candidates to submitting INDs to start clinical trials.

WuXi AppTec

WuXi is also making a splash in the CDMO space, which opened another facility in 2021 at the Navy Yard. The new facility’s 140,000 square foot space more than triples the company’s previous testing capacity.

Spark Therapeutics/Drexel

In December, Spark Therapeutics announced the creation of a new gene therapy innovation center on the Drexel University campus in University City. The project represents an investment of $575 million and is tailor-made.

“The Spark investment anchors here in Philadelphia. And that also lends credence to the idea that Philadelphia can be a major manufacturing hub. I think we’re going to see very rapid activity there,” Fetterman said.

Predictions 2022

With such a busy 2021 for Philadelphia life sciences and biotech companies, it’s no wonder experts think next year will be even bigger.

“I think we’re going to see a lot of new capital being announced in Philadelphia, as well as new projects that have new investments that haven’t been in the area before, which is really exciting,” Gilchrist said.

Current trends are on the rise for both the construction of new spaces and the conversion of existing buildings.

“There are so many buildings both in the city and in the suburbs that are being marketed for life science use – it looks like there will be an explosion of new companies jumping on this space and using the existing space”, Matson mentioned.

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Erika Riley is a journalist who covers topics such as business, real estate and economics. She is based in Frederick, Maryland.

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