Insights Category: Thought Leadership

This article initially appeared in Lab Manager on June 7, 2021.

The outlook is mixed for lab design and construction opportunities, according to a quarterly index that tracks proposal activity across various construction markets. Performance data for medical laboratories and pharmaceutical production facilities suggest substantial medium-term and long-term growth, while professionals working in education-based laboratories report weaker than average activity.

Every quarter since 2003, PSMJ—a publisher, education provider, and advisor on architecture and engineering business management—has measured the health of the architecture, engineering, and construction (AEC) industry by collecting proposal activity data from firm leaders. In addition to 12 major markets served by their US- and Canada-based AEC clients, PSMJ tracks the fortunes of 58 submarkets, including some that are completely or partly composed of laboratory facilities.

Among submarkets, the medical laboratory sector has shown consistent strength for several years. Its net plus/minus index (NPMI)—which measures the difference between the percentage of respondents seeing growth in the market and those seeing a decline—was in the middle of the pack for the first quarter of 2021. However, that was off a fourth quarter in which it reported the sixth-highest NPMI of all submarkets.

In contrast, results for education labs have been historically erratic. This includes a stretch of five consecutive quarters, beginning prior to the onset of the pandemic, in which more respondents said that proposal activity was slowing than growing. Education labs broke the streak in the first quarter of 2021, recording an NPMI of 13 percent. However, this was still in the bottom third of all submarkets in a quarter that saw 54 of the submarkets improve on their prior quarter result.

“We tend to see larger swings in lab-related submarkets,” says Greg Hart, a PSMJ consultant and manager of the Quarterly Market Forecast (QMF) survey. “Labs seem to respond more quickly than other submarkets to market conditions, which we believe accounts for much of that volatility. We saw this during the pandemic as medical labs and pharmaceutical projects remained relatively active, while education-based labs struggled.”

Hart adds that all laboratory-related markets will likely see a bounce if President Biden’s proposed infrastructure plan passes. It includes $220-billion for public and private lab-related projects, including $30 billion in research and development aimed at spurring jobs in rural areas and $40 billion to upgrade physical infrastructure of research labs in federal and university settings, according to Roll Call.

The pharmaceutical production submarket, which is composed partly of laboratory work, recorded an NPMI in the top quartile for the first quarter. This marked an impressive recovery from late 2019 when it was among the worst-performing submarkets in the survey. While 62 percent of the respondents that work on pharmaceutical production projects reported growth in the January to March 2021 period, only five percent saw a decline (resulting in its best-ever NPMI of 57 percent).

Labs supplant commercial developments

The PSMJ data indicates that privately funded lab facilities are currently outperforming those that rely on public funds. It also supports a trend seen in some of the leading geographic markets for life sciences development, such as Boston and San Francisco, in which projects originally slated for commercial or residential purposes are being reconfigured into science-based facilities.

David Giangrande, a professional engineer and the manager of Massachusetts operations for Connecticut-based GM2, Inc., says that he has had multiple commercial projects altered midstream in this way. “Projects we were designing a year or so ago for office space or mixed-use retail/residential are now going to be life sciences buildings with lab facilities,” says Giangrande, whose Somerville, Massachusetts-based firm, Design Consultants, Inc. merged with Glastonbury-based GM2 in December 2020. “These are all privately funded projects, and we’re seeing a mixture of lab space, office space, and even manufacturing.”

The lab market boom in greater Boston is the catalyst behind the rapid rise of TRIA, a Boston-based architecture and interior design firm that has grown to 50 people in just six years. Co-founder and principal Jeannie Thacker says that her firm experienced some delayed projects during the pandemic, but remained busy throughout. As the world returns to normalcy, she anticipates a bump in lab development activity in the coming months.

“As we get to the other side of the pandemic, we’re seeing more of our biotech clients getting back to a sense of normalcy, and we’re helping them define what that is going to be,” says Thacker, who held research positions with Harvard Medical School and Takeda Pharmaceuticals before becoming an architect. “They had plans and made investments prior to the pandemic, and they’re starting to ramp back up on the projects they put on hold.”

Thacker notes that more lab-based projects are being combined with the manufacturing function, resulting in different needs for utilities, transportation, and logistics, and other support systems that normally would not be necessary for a lab facility. This ties in with the trend of repurposing commercial buildings, as their size and location facilitate the ability to perform both roles at the same site.

This may also help explain another trend that Giangrande is seeing—laboratory facilities located in the heart of vibrant commercial and retail areas. “They’re not sticking these facilities on large lots in a suburban area or industrial park,” he says. “Lab space can be anywhere. The buildings we’re working on are prominently positioned in central urban locations.”

While the thriving life sciences and lab business has driven her firm’s success, Thacker worries that the recent heightened public interest has tempted many new vendor entrants to the industry. “There’s so much technical expertise required to execute these project types and this surge is stressing an already limited pool of talent,” she says. “Labs are our life blood; it’s what we do and have always done, and we are in it for the long haul. I’m hoping that the pandemic has helped to emphasize just how amazing this industry is, and that we will get an influx of people who are just as excited as we are about the small part we play in getting drugs to patients and advancing scientific discovery.”

Education research is huge with potential to grow

All research needs to be considered in context, so it is important to note that the PSMJ data tracks trends in markets and submarkets without regard to their relative size. The QMF is designed to give a longer-term view than most research because it focuses on one of the earliest measurable data points, proposal activity.

Despite the tepid pace of growth for education labs over time, the market is huge. According to a National Center for Science and Engineering Statistics (NCSES) report published by the National Science Board (NSB) in 2020, academic institutions historically perform about 10 to 15 percent of total US R&D, including about half of all U.S. basic research.

“In inflation-adjusted dollars, total academic research and development (R&D) has grown every year since 1975,” the report states. “Academic institutions in the United States performed $79.4 billion in R&D in 2018, and they have long been responsible for performing about half of all US basic research. Nearly two of every three academic R&D dollars supports basic research, whereas both applied research and development receive smaller but growing shares.”

Kevin Hinrichs, president of California-based architecture, interior design, and design strategy firm Taylor Design, says that the market for education labs is in funding limbo as it waits for the smoke to clear from the pandemic. “Uncertainty is the enemy,” says Hinrichs, whose firm’s lab portfolio spans the healthcare, higher education, and government research markets. “States are starting to set their fiscal year 2022 budgets, and their level of higher education funding may largely depend on how well they weathered the pandemic. Federal funding seems likely to increase under the new administration, but It is still in a transition phase, which adds more to the uncertainty.”

The NCSES study (“Academic Research and Development” by Josh Trapani and Michael Gibbons) notes that the federal government is the largest financial supporter of academic R&D, providing more than half of total funds in 2018 (the last year with reliable statistics). After several years of declining levels, federal funding for academic R&D increased by five percent from 2015 through 2018, in inflation-adjusted dollars. Institutional support has increased more rapidly and represents an increasingly larger share of total academic R&D. In 2018, institutional funds constituted more than one-quarter of university R&D, up from less than one-fifth in 2010.

According to NCSES, academic institutions added more than 38 million net assignable square feet (NASF) of science and engineering (S&E) research space between 2007 and 2019, reaching a total of 227.3 million NASF at research-performing universities and colleges in fiscal year 2019. Research space in the biological and biomedical sciences accounted for about 40 percent of this growth.

Growth factors in place

Even prior to the deadly pandemic that shut down much of the world in 2020, the outlook was highly optimistic for growth in lab design and construction opportunities. As the population ages, average life spans increase, and scientific breakthroughs inspire the need for further research and development activities, lab submarkets across all sectors seem primed for a boom.

As noted above, the pharmaceutical production’s first quarter NPMI achieved its highest level since PSMJ added submarkets to its survey in 2006. Medical laboratories hit its second-highest point in the fourth quarter of 2020 with an NPMI of 54 percent, topped only by a 56 percent recorded in the fourth quarter of 2006.

For the education lab market, in particular, results from the second quarter of 2021 will be telling. It has been among the weakest submarkets for nearly three years, and the first quarter has historically been its best by a wide margin. Will it revert to form and backslide in the second quarter, or will increased government investment, a strong economy, and favorable demographic and societal factors drive a resurgence? PSMJ releases its second quarter QMF survey results in mid-July.

This article initially appeared in Banker & Tradesman on April 18, 2021.

With her specialty in interior design, TRIA’s Marilyn Shen says she spends the vast majority of her time anticipating people’s needs and likes. That emphasis has taken on a paramount role in her new position as the Boston-based firm’s director of integrated workplace design, as companies ponder how to configure their post-pandemic real estate. Architecture was a change of career for Shen, who started out in consulting and, like many professionals of her age group, enrolled in graduate school following the dotcom meltdown. Shen joined TRIA in March following 15 years at Visnick & Caulfield.

Q: How are clients approaching their future workplace strategies as the pandemic appears to recede?

A: I think a lot of clients are confused. Nobody knows what to do, so there are no steps to figure out because nobody knows what’s happening next. Now we’re opening a new stage where people are starting to think about it. More people are getting vaccinated and people are trying to think about how we bring people back and more importantly, do people want to get back? They are going into a cultural assessment of what does a hybrid model look like, and what does that mean to the space? A lot of clients are asking if we can assess, in surveys, why people would want to come back to work and how to make people feel comfortable. Where most places are hoping to land is something like a hybrid model where we don’t design the space for the whole population. Even pre-pandemic, a lot of companies were trying to get to that. They just couldn’t get over the hump of the remote worker. Pre-pandemic, nobody had an assigned desk. Because of COVID, desk sharing is more of a concern. People now want their dedicated space.

Q: Is bench seating gone for good?

A: I don’t know if it’s no longer in the picture, but I do think more barriers and the 6-foot distancing model will stick around. People will feel most comfortable if they’re spread apart.

Q: What sort of questions do you ask in the employee surveys?

A: The first thing to understand is why people would come back to the office, and what is the type of work that requires you to come back to the office, and to design a reason for people to want to come back. It’s around teaming, collaboration, mentoring and what you’re missing being at home. The survey also addresses what tasks you feel are more productively done at home. Other clients question the culture and social aspect of work, and how that impacts their relationships with coworkers and creativity and innovation. That’s a big topic.

Q: Do the responses vary significantly by industry?

A: From my own personal observation, I feel everybody is equally confused. But I think it’s less industry based, but more generation-based. I look at TRIA: Our offices stayed open because we were deemed essential, and it’s interesting to find most of our junior staff don’t come in as much because they’re much more comfortable doing things remotely and they grew up with the virtual meeting as “normal.” For us who are used to seeing people in person, it’s different and you see more of the older generation at work.

Q: What programming tools do you use to help clients make these decisions?

A: Our programming process is quantitative and qualitative. The quantitative is how big and how many? We set up a spreadsheet, put the square-footage and people in and how much space you need. With COVID, circulation needs to be increased. The other, which is more qualitative, is visioning sessions and interviews with clients to understand their culture and what they want to accomplish. The space is where our clients create a culture for their employees and their clients, so it’s asking questions about what they want and need in the space.

Q: How can architects use design to advance diversity, equity and inclusion?

A: I’m a firm believer in universal design as a concept. A lot of people think only in terms of accessibility. That’s one thing. You want to design a space that makes every person feel comfortable. We should be celebrating ramps instead of making it an additional thing in case somebody needs it. You’re not just doing that for the person in the wheelchair. You’re doing it for the employee who goes skiing and breaks a leg. It isn’t just about the disability. You’ve got to include everyone, whether they’re tall or short. I’m 5–1, so some spaces are hard to navigate and read something at a typical height.

It’s also to celebrate cultural diversity and pay attention to the psychology of certain colors. Some colors mean things that make people uncomfortable. My mom always tells me in Asian culture, red is a very lucky color. If you look at the stock market in Asia, red is positive and green is negative. It’s creating these things that everybody enjoys and celebrating diversity. As a woman and mother, we talk about wellness rooms that double as a sick room. As a working mother, I do not want to pump my milk in a room that somebody just got sick in. It just doesn’t make sense. It’s simple stuff.

Q: As an Asian woman, have you encountered biased attitudes or treatment in your professional life?

A: I definitely have in my career experienced stereotyping but I can tell you whether it’s because I’m a woman or an Asian. The fortunate thing is we live in a community where diversity is celebrated. I feel my Asian identity has less of an influence than being a woman, but it’s hard for me to decipher because I’m both all the time. It’s getting better, but a lot of clients, when I’m having a meeting with the C-suite, often I’m the only woman in a room of older white men. There is always this stereotype because I look younger: Does she know what she’s doing? Fortunately, it hasn’t been to the point where it’s been crippling or I can’t handle it.

Q: How has your own work routine changed over the past year, and how do you rate your own productivity compared to pre-pandemic?

A: I come in more often because I’m new to TRIA, so for me to meet people and establish my presence and understand the culture, I need to be physically here. I have been coming in three days, and the last two weeks four days, on average. I think people are productive. When doing head down work, checking emails, it’s much easier at home in some ways because there’s no distractions. The benefit to the office is doing collaborative work, especially creative work.

Shen’s Five Favorite Children’s Books:
1. “The Little Prince” by Antoine de Saint-Exupery
2. “The Giving Tree” by Shel Silverstein
3. “Saturday” by Oge Mora
4. “Guess How Much I Love You” by Sam McBratney
5. “Harold and the Purple Crayon” by Crockett Johnson

This article initially appeared in High Profile on October 27, 2020.

Imagine being in the throes of designing a gleaming new office building and a global pandemic forces people out of offices and into their homes. It sounds like it could be a scene out of a sci-fi movie but it’s the situation many developers find themselves in as companies scale back on space.

Office projects in design today run the risk of sitting vacant for years. It’s no surprise that in the home of one of the largest life sciences clusters in the country, developers are choosing to convert some or all planned commercial buildings into lab space.

Clients are asking us to reconfigure office projects midstream in the planning process to capture the demand for lab space. The decision to convert depends on several factors including the location of the property relative to existing life science hubs, size of the floor plates, the spacing of the column bays, and the location of air handling units and related central mechanical systems.

Developers contemplating refocusing the design of office projects should first huddle with a team, including architects, to determine what is possible. Here is what the design team will need to consider before making any recommendations.

Base Building Considerations

• Examine the core of the building to determine what modifications are necessary to incorporate adequate shafts and understand the impact on the rentable area.
• Evaluate the roofscape’s potential for large air handling equipment necessary to ventilate the laboratory spaces. The preference would be to create a centralized air system on the roof, as opposed to on-floor systems serving a single tenant.
• Consider placing building-wide lab support spaces (e.g., mechanical rooms for shared lab services) in less desirable space such as a basement or remote areas of the ground floor. Having activated space such as shared amenities or food and beverage on the ground floor is highly desirable to attracting the best and brightest life sciences workforce.
• Review ground floors to determine if there is enough loading dock access to handle deliveries for lab-oriented tenants without conflicting with other tenants.

The best time to consider converting an office project to lab is when the building is still on paper, not when cranes are in the air, or worse, when the lights are on.

Tenant Floor Considerations

• Floor-to-floor height: 14’-6” generally accommodates most biology and chemistry laboratory programs.
• Column bay spacing: 33’ is becoming the norm, providing 11’ bays which accommodate emerging oversized automated equipment and large tissue culture labs, while providing adequate aisles.
• Size of the floor plate: 30,000 – 60,000 useable square feet (USF) will accommodate single or multiple tenants.
• Possibility of linking floors for larger tenants: Consider an interconnecting open stair as an active hub to create a sense of community across two or more floors.

Final Steps to Ensure Success

• Confirm with the landlord that capital investments in conversion will meet long-term financial models for the property.
• Determine if the entire property warrants conversion.  Chemical Storage Regulations favor situating tenants with labs on floors six or below.  In substantially taller buildings, consider a partial mechanical floor mid-building to serve the lab floors without compromising the floor plates above.
• Conduct test fits of typical life sciences lab/office programs to validate the floor plate configuration will yield a satisfactory arrangement for a wide range of tenants.
• Ensure the design promotes a sense of community throughout the building.  Life sciences companies succeed through discovery, which is fostered by collaboration and interaction.

Reconceiving projects during design from office use to lab/office use is a savvy short-term solution to the current lack of demand for office space.  With a well-informed shift in design focus, the results can be equally as successful as if they were the original intentions.

We are closely monitoring the COVID-19 situation and taking precautions to make sure the safety and health of our employees, clients, and partners are our number one priority. Needless to say, the heart of our core values are relationships and making sure we stay committed to our clients. Because of this, TRIA is dedicated to serving our clients and making sure that we continue to meet our deliverables and ongoing project needs. We are proud of the fact that many of the clients we serve are in the life sciences industry, a critical need now and always.

The following are just a few ways we are putting safety first:

• We are thankful that technology has enabled all our employees the ability to work from home. While the TRIA office remains open for employees that prefer to come in, most of us have set up fully functioning workstations at home.
• In our office, daily deep cleans are taking place to protect our employees who prefer to work from the office.
• We encourage our staff to schedule client and/or project team meetings virtually to support the need for social distancing and limited travel.
• Communication is key during this time. Leadership continues to send emails to staff with updates to this ever-evolving situation. All employees have Skype for Business enabled to allow for easy contact with one another.

At TRIA, we will continue to monitor the situation and respond to changing needs during this unknown time. We stay committed to the safety of our employees, continuing to meet project deliverables, and doing our part to limit the spread of COVID-19.

Last, but not least, we want to deeply thank the healthcare workers in Boston and around the world who are working tirelessly to treat patients. Our thoughts are with these fighters.

Be well,

Your friends at TRIA