The University of Pittsburgh is actively seeking proposals from developers for multiple parcels on or near the university. Part of Pitt’s master plan is the private development of property along Forbes and Fifth to be space used for research partners from industry and government. These projects won’t be university-owned but the tenants will be driven by the university’s technology transfer activity, much like as happened with the Murland building, which is being occupied primarily by Pitt users. This search is in addition to the Walnut Capital research tower and Wexford Science Technology research building that have been proposed to Pittsburgh Planning Commission.
What is being proposed and envisioned for the future of Oakland’s “Main Streets” is very much part of a national trend for university-adjacent development.
Alexandria Real Estate Equities Inc. recently won the rights to develop a property in Stanford University’s research park. The company will be opening a San Francisco Bay location for its life science and biotech start-ups. This area of the country has a thriving life science industry, and could serve as a target demographic for developers moving forward.
Growth in Biotech and Life Science
A study by commercial real estate firm CBRE explains that the San Francisco area is the country’s second largest biotechnology/life science cluster (with Boston being number one). San Francisco’s growth as a biotech hub facilitates the creation and maturation of start-ups and businesses in these fields, while also attracting venture capitalists who are looking for investment opportunities. Many venture capital firms are located in the area because they anticipate investing in the biotech field, and want to be close to the start-ups that they foresee themselves investing in. This is in addition to the fact that Stanford itself is one of the top recipients of funding from the National Institutes of Health. This allows Stanford to provide additional support for biotech initiatives on its campus.
Clare Kennedy, a commercial real estate reporter at CoStar, addressed why biotechnology is an attractive investment for venture capitalists:
Some of the proliferation of these companies stems from the region’s robust venture capital, which built Silicon Valley and is now pouring money into biotech-oriented businesses in fields such as pharmaceuticals, genetic research and medical devices that don’t directly provide health care services, but serve a fast-growing life science industry developing treatments for an aging population, whose need for medical interventions is expected to rise in coming decades.
Developing for Biotech and Life Science
How is Alexandria going to take advantage of this space? Currently, their plans are to use the facilities to house its many life science start-ups. Alexandria has a program called LaunchLabs, which provides member companies access to multiple perks as described in its press release:
The unique, full-service platform will provide member companies with highly flexible, move-in-ready office/laboratory space, sophisticated mentorship and access to strategic investment capital through the Alexandria Seed Capital Platform, the company’s innovative seed-stage funding model.
Alexandria has put LaunchLabs into practice in other areas of the country and is now expanding it to one of the top biotech hubs. The culture, infrastructure, and assistance that they provide does, in fact, facilitate the growth of its member companies, so expanding it to San Francisco is the next logical step. The start-ups and small businesses that take advantage of this opportunity will find themselves benefiting thanks to the LaunchLab philosophy.
According to Alexandria, biotech companies are best able to succeed “when they are in close physical proximity to capital, academia and other firms that have a complementary purpose.” Jennifer Cochran, the Shriram chairwoman of bioengineering at Stanford, adds in that, “biotech entrepreneurs often need to commit to multi-year leases, large footprints and expensive lab build-outs when they aren’t even sure they have a viable product yet.” Stanford and Alexandria believe that the addition of LaunchLabs should serve as a lifeline to these small and mid-sized companies.
Partnership with Stanford University
Alexandria’s confidence is clear. There was a bidding process to determine who would be able to develop this property within Stanford’s research park, and Alexandria won. At a cost of $26 million, the company was able to get the rights to use, and redevelop the land over the course of the next 51 years. Stanford discussed the thought process behind this move, and what lead to its deal with Alexandria.
When the building was recently vacated, Stanford saw an opportunity to create a flexible and vibrant space that would enhance the connections between the existing life science ecosystem of medical facilities, researchers and companies in the surrounding area, while also encouraging progress toward an even more diverse life science community. The university held a competition for firms that specialize in this work and chose Alexandria, an experienced developer and operator of successful life science communities near academic campuses.
Together, Stanford and Alexandria are aiming to continue the growth that the biotech and life science industries are seeing in San Francisco.
What the partnership between Alexandria and Stanford shows us is that the life science and biotech field is growing rapidly, and developers would do well to consider how that may benefit their own business moving forward. A growing industry that requires specific infrastructure to be able to fully act on its growth potential could serve as a prime target demographic for developers who operate in any of the growth regions in the country as listed by CBRE. By developing buildings for universities and/or for biotech/life science companies, developers can find a niche demographic to market, design, and build for.
I have read Pitt’s long range plan and from my perspective it is important for both their educational and research functions. I was surprised to see the opposition to the Wexford 13 story building where critics questioned the goals of the University. My first impression was embarrassment that a building of such modest size would be viewed as too tall but more surprised that local residents would question the goals of the University. I follow Penn State more closely and notice that 13 story buildings are the norm for State College with 3 built and 3 under construction.
One of the biggest surprise I have in this century is to see a video of a city I consider to be 3rd world and am blown away by the high rise modern skyline. There is a lot of construction going on in Pittsburgh but I don’t think its leaders should lose track of the fact that this is common all over the country. I think it is time Pittsburgh leaders should benchmark their economy and growth more against other cities instead of desire of long term residents to maintain their life styles at the expense of younger people’s opportunities.
I think the city and Oakland Planning & Development will eventually adjust expectations for the “new” Oakland. The residents there have a history of vocal opposition. Sometimes that’s been very productive but I agree with you that this isn’t one of those cases. Oakland isn’t Squirrel Hill. There are already towers (hard to even use that word for a 13-story building) along Forbes and Fifth. No views will be blocked of natural beauty. The opposition – if successful – also eliminates jobs being developed that could create residents for South Oakland neighborhoods, and revitalizing Oakland’s residential neighborhoods is a goal of OPDC.
Pitt’s master plan is completely in step with what is happening in other cities with thriving universities (and there are fewer of those). Pitt plans for the western Forbes/Fifth corridor to be built out with private development. The economics of that development dictates that the buildings be mid-rise, rather than the three-story storefronts of some of the existing blocks. Before any of Pitt’s direct investment has started, there are already four such buildings proposed or under construction. Murland’s office is virtually leased already. Wexford, Walnut Capital, and Elmhurst have all announced flex research/lab buildings for lease. Wexford’s is the tallest but the others will be at least eight stories. The planning process should be guided by what the market demands too.