More Federal Funding for Construction, Lab Space Demand Grows

Twitter icon
Google icon
LinkedIn icon

More Federal Funding for Construction, Lab Space Demand Grows

A Tradeline Industry Direction Report

Although the pace of recovery remains slow in the general economy, the picture for research construction continues to show signs of improvement. The National Institute of Standards and Technology (NIST) recently announced another round of federal grants for lab construction, its second this year. At the same time, demand for lab space is increasing in some areas. As demand for space eats up the existing supply, that typically spurs construction of new buildings. The question is just how far off the tipping point is.

NIST Announces More Construction Grants

On September 30, NIST announced a total of $50 million in grants to five institutions. The funds will support construction of new research facilities for a range of research projects, including nanometer-scale electronics and microbe ecosystems in the oceans. The five projects receiving funding under NIST’s Construction Grant Program will contribute to almost $133 million in new laboratory construction projects. The competition for these awards was announced in February and NIST reports receiving more than 100 proposals.

Applicant organizations are required to fund at least 20 percent of the annual project costs.

“There’s a collaboration here,” says Byron Roberts of the University of Michigan’s College of Engineering, which received approximately $9.4 million from NIST for its $41.2 million Center of Excellence in Nano Mechanical Science & Engineering (NAMSE) in Ann Arbor. “There is some federal funding, some university funding, and some private funding. I don’t know that any one of these puts us over the top, but certainly all are appreciated, and for a project of this magnitude and this importance, all are necessary.”

The three-story, 63,000 gsf NAMSE building (including one level below grade) will house ultra-low vibration (ULV) laboratories, including 60 laboratory modules together with faculty and graduate student offices. Planned research projects for the new facility range from the analysis of single biomolecules to metrology of nanoparticle-based composites to precision nanomanufacturing and assembly. Roberts says he expects groundbreaking to take place next year, with completion expected by Summer 2013.

This is the second round of construction grants awarded by NIST this year. In January, NIST awarded $123 million in grants from the American Recovery and Reinvestment Act (ARRA) for laboratory construction projects ranging from off-shore wind power to nanotechnology. Since these projects were required to be shovel-ready, many are already under construction.

The 12 projects amount to more than $250 million in new construction. However, that number only reflects the non-NIST amount going to a specific project, not the full context of related construction activity. For example, The Laboratory for Advanced Quantum Science (LAQS), a 21,000-sf space at the University of Maryland at College Park (UMCP), has a total project budget of $15.5 million and received $10.3 million from NIST. But LAQS is just one part of the UMCP’s new Physical Sciences Complex, a $128-million, 158,068-sf facility that broke ground in May.

According to NIST, the ARRA competition drew over 160 competing requests. NIST officials say that future grants will depend on whether the program is funded in its FY 2011 budget.

Demand for Lab Space on the Rise?

Tradeline Partner-level Sponsors

Another bellwether of improvement is a growing demand for laboratory space. The situation varies from market to market in the US. For example, San Diego continues to report vacant research space available, but in Seattle lab space is hard to find.

Bill Neil, a senior vice president in the Seattle office of GVA Kidder Mathews told the Puget Sound Business Journal recently that only about 3 percent of Seattle’s office-lab space was vacant (the office vacancy rate at the time was more than 21 percent). Neil notes that the situation is putting a squeeze on local biotech firms and prompting a number of developers to consider new lab projects.

The Boston Globe reports the market for “life science real estate” in Massachusetts is also showing signs of improvement, along with the greater Boston office market. They cite new data from Thompson Hennessey & Partners, a Boston-based commercial real estate advisory firm, showing that in Cambridge, Mass., lab vacancy has been dropping all year and now stands at 13.4 percent. At the same time, rental rates for laboratory space have risen over the same time period to a current average of $52.60 per sf.

Again, at what point rising rental rates and space demand translate into new construction remains to be seen.

By Lee Ingalls

Links


NIST Awards $50 Million in Grants for Construction


NIST Awards $123 Million in Recovery Act Grants


Puget Sound Business Journal: Puget Sound biotech space hard to find

Boston Globe: Lab space real estate market shows improvement

Project Data