The opportunity offered by technology and energy markets is beckoning property investors to near biotech clusters. Resurrecting from the recession, the two (technology and energy) marketplaces are now commanding the attention of real-estate investors.
A similar dynamic is sprouting in biotech clusters that are typically marked by ever-increasing life-science organizations in the neighborhoods of academic research institutions.
The growing demand
Commercial demands are driving fundamentals in the nodes. Twenty-five years ago, the perception of leasing lab space was not so popular. Most private companies were located on centralized research centers where they heavily invested in facilities they anticipated to occupy indefinitely. Young biotech organizations broke that mold during the early 1990s, and the trend has since ruled the research industry.
Almost all start-up healthcare research companies leased everything due to lack of enough resources. However, this is now changing. Healthcare organizations are now outgrowing their premises and have been forced to seek more space.
Renting vs. owning
Renting is attractive since major institutes of health (sources of funding) prefer it to owning when it comes to research grant reimbursements. Renting offers research start-ups access to a diverse pool of capital.
Caution: Be careful with the lease terms
When looking for a lab space to rent, you must be careful. You should understand that leasing property for medical research is different from that meant for commercial purposes. You should exercise caution, especially if you are operating a scientific research lab. For instance, you must always remember that your leased building can be sold at any given time. This is likely to leave you in the hands of someone with less experience than the original lease draftsman. Note that your research company might want to devote a considerable amount of resources for the purposes of improving the space. So, maintaining a good relationship with your landlord is paramount.
Tested, commissioned, and certified
Additionally, you should insist that the property is fully tested, commissioned, and certified before moving in. Otherwise, you might end up jeopardizing the integrity of your equipment, research materials, as well as animals. Most landlords are unlikely to understand fundamental facts touching on research requirements of a lab, so it’s upon you to specify your needs.
Take control
Don’t leave it upon your landlord when it comes to licensing as well as regulatory issues touching on research operation.
Typically, a standard lease stipulates that all the issues that might affect the certification of the premise— the storage of hazardous materials, radioactive elements, or chemicals; delivery as well as removal of food plus animal waste products; and water runoff systems—should be your sole responsibility. Ensure that the lease includes explicit provisions touching on the rights and responsibilities of both parties.
Your operation shouldn’t be put at the mercy of your landlord.
The power of renegotiating your lease
Negotiate and re-negotiate vigorously for assign ability and subleasing provisions so as to protect your organization in case you vacate the premises before the expiry of your lease.
The ideal lease term
It is impossible to predict Federal support when it comes to scientific research, so go for a relatively short-term lease—ideally ten years and 5-year renewals. This is a safe hedge against funding slumps. You should be careful that your lease doesn’t allow your landlord to penalize you for investing heavily in making your space better during the time of renewal. So, be careful when looking for a lab space for rent.