Life Sciences Construction Remains Solid

Poised for Even Stronger Growth Post-Pandemic
Published 6-10-2020

Amid sobering reports of job losses in commercial real estate, coupled with months-long construction shutdowns in major markets like Boston and New York, the life sciences sector is poised to experience a less dramatic disruption, and possibly emerge from the pandemic even stronger than it was before. “COVID is a healthcare crisis, so it needs a healthcare solution, and that life sciences and biophparma solution has to be constructed,” says Kevin Chronley, vice president of A/Z Corp. and immediate past president of the Boston Area Chapter of International Society for Pharmaceutical Engineering (ISPE). Chronley predicts that construction will run the gamut from medical device manufacturing and biopharma laboratories to education and training facilities.

“It’s a growing industry, and it’s going to continue to grow,” says Chronley. “Undeniably, the pandemic has been disruptive to our industry. Yes, people stopped, paused, and deferred their plans. In 2020, construction costs in our industry will probably be less because of that.”

Boston, which was hit particularly hard by the virus, is a hub for life sciences research and development.

“The life sciences industry continues to experience the influx of capital and an overall positive sentiment that have contributed to positive activity in the sector,” CBRE’s Steve Purpura, a vice chairman specializing in the life sciences industry, says in the most recent CBRE Boston Life Sciences MarketFlash. “Since early March, 11 life sciences leases totaling over 300,000 sf have been completed in the Greater Boston area, which includes three new leases totaling more than 100,000 sf since the beginning of April.”

For the next six months, says Chronley, life sciences companies will focus on addressing the work environment to ensure that their employees are safe in the offices, research labs, and manufacturing facilities. “The priority to date has been to protect the product and the people making the product,” he says. “We are now getting into the next phase, which is sustainability.”

Longer term, when the economy begins to recover, life sciences will top the priority list of facilities.

“We expect some pent-up demand,” says Scott Tomkins, business development director for Cianbro. “One architect said to me that there’s so much healthcare work, he can’t keep up.”

An example is Southcoast Health’s $14 million, state-of-the-art intensive care unit at St. Luke’s Hospital in New Bedford, Mass., which was completed in mid-May, one month ahead of schedule, in response to the pandemic. The project includes the renovation and expansion of a space on the hospital’s fourth floor to create a modern 16-bed ICU. The new, 16,000-sf space doubles the size of the hospital’s previous ICU, which will eventually be repurposed for medical and surgical patients. The new ICU adds 16 beds in 440-sf rooms to St. Luke’s Hospital’s capacity.

“Society is basically saying, ‘We demand healthcare,’” says Chronley. “COVID will require a vaccine and therapies, and that will drive money into the area. It will fuel construction and it will fuel people going into these industries.”

Higher education institutions, which have been hit particularly hard by the shuttering of campuses, will also benefit. “Educational facilities have already become entrepreneurial,” says Chronley. “Higher education is the incubator for success. They will train the human capital that is so critical to biopharma.”

“Office and lab construction—mostly renovating and retrofitting existing facilities—will be hot and heavy in six months,” he predicts. “Manufacturing might lag a little because it’s a bigger decision.”

Life Sciences Manufacturing

Down the road, Chronley believes manufacturing of medical devices and biopharma that is now done overseas will start to come back to the U.S.

“There’s a potential national security argument to be made for relocating global manufacturing to the U.S.,” he says.

Early in the pandemic, for example, U.S. healthcare facilities and government entities faced a critical shortage of the swabs used to test patients for the coronavirus. They had been relying heavily on a manufacturer in Northern Italy, where the virus shut down the country before it had spread to the U.S. The only other major manufacturer worldwide is Puritan Medical Supplies in Guilford, Maine, which has stepped up to fill the void. With $75.5 million in funding from the CARES Act, Puritan will double its production with a new 95,000-sf facility that opened this month.

Innovation in manufacturing processes over the past five or 10 years make this expansion economically viable, says Chronley.

“The facilities are smaller, the technology inside the facilities is modular, and the level of automation and controls is higher, all of which lowers the cost and is more flexible,” he explains.

Moderna, Inc., the Cambridge, Mass.-based pharmaceutical company that made headlines last month with promising early trials for a coronavirus vaccine, was recognized by ISPE last year for its innovative manufacturing facility.

“The digital production environment is designed to enable high throughput with a robust and diverse set of products,” says an article published by the ISPE. “The enterprise and process control systems are integrated in a manner that enables flexibility and rapid new product introduction in a highly-automated landscape.”

“They are walking down the path of where the biopharmaceutical industry is going,” adds Chronley. “The innovation is the modularity—the building, the processes, the supply chain, even the paperwork is modular.

“They have small cleanroom suites with plug-and-play components and single-use disposable technology. It’s not like in the old days, when you built a huge building designed to do one thing, and if the product failed, you were stuck with this obsolete building.”

Moderna is part of a movement toward highly flexible research and development labs. “If they don’t succeed in making a COVID 19 vaccine, they’ll make something else.

“COVID will accelerate that movement,” he says. “The time is right.

“Big pharmaceutical companies are dealing with a level of uncertainty, but they are spending money on capital construction,” says Chronley. “You might argue that it’s not going to happen for another couple of weeks or until the fall, but I don’t know how you can argue that it’s not going to happen.

“In my world, it’s already happening,” he says. “I’m still getting construction POs, and I’m hiring. I’m getting ready for a wave—not a tsunami but a wave. The tsunami might be in 2021.”

By Lisa Wesel