http://www.nytimes.com/2006/03/22/realestate/commercial/22biotech.html
March 22, 2006 Square Feet Making Space for a Biotech Center By ROBERT SHAROFF SKOKIE, Ill. The acquisition and subsequent redevelopment of a former Pfizer pharmaceutical research facility here by Forest City, the Cleveland-based developer, promises to quadruple the amount of speculative office space available for biotechnology companies in the Chicago area. Forest City bought the one-million-square-foot complex last spring for $43 million. Since then, the company has demolished 9 of the 13 buildings on the 23-acre campus, leaving about 700,000 square feet of offices and laboratories. The company plans to build an additional 1.3 million square feet of new space, also for offices and labs, over the next 10 years. Over all, the project is expected to cost more than $500 million. The goal, according to Gayle Blakeley Farris, president of the science and technology group of Forest City, is to create something that the company says is long overdue in Chicago: a biotech cluster similar to those in the high-tech bastions operating in the metropolitan areas around Boston and San Francisco. "We think there's an opportunity for Chicago to become the third coast for the biotech industry," Ms. Farris said. "There are a number of major institutions here such as the University of Chicago, the University of Illinois and Northwestern University where important research is going on. But up until now, there hasn't been a critical mass of space available for companies seeking to capitalize on that research." According to a recent study commissioned by Forest City, there is a shortage of speculative biotech office and laboratory space in Chicago. The city has about 500,000 square feet, much of it in incubator facilities owned by public entities like the State of Illinois. By comparison, the areas around Boston and San Francisco the acknowledged leaders in the field each have more than 11 million square feet. But even much smaller cities like Madison, Wis., and Raleigh-Durham, N.C., outperform Chicago in this respect. "The lack of space has been a stumbling block," said David Miller, president of the Illinois Biotech Industry Organization, a local trade group. "What has happened in the past is that a scientist could usually get a few thousand square feet of space from a university or a corporation to pursue a promising idea but the minute he or she got bigger and needed 10,000 or 20,000 square feet, it was a problem." Scott Brandwein, senior managing director of the life sciences group of CB Richard Ellis, the national real estate services firm, which is assisting Forest City in leasing the Skokie center, agrees. "There are very few options for companies coming into the market," he said. "There's never been a speculative market here." What speculative space is available generally leases for $20 to $30 a square foot. Forest City is hoping to do better than that about $30 to $40 a square foot for at least some of the newer space in the complex. "We're targeting three types of tenants," said Michael Rosen, senior vice president for new business development for the center. "The first is international companies in need of space for a U.S. headquarters, the second is companies that provide services to the pharmaceutical industry on a contract basis and the third is new companies that are ready to leave the incubators." The facility currently is vacant except for the NanoBusiness Alliance, a trade organization for the nanotechnology industry, which has about 500 square feet. Mr. Rosen, however, said that Forest City expected to announce commitments for about 150,000 square feet of space soon. One company looking at the project is Midwest BioResearch, a biotech start-up based in an incubator facility owned by Northwestern University in nearby Evanston. "Our initial need is for 10,000 square feet but we could double that in a fairly short period of time," said Mark Weston, a business consultant who is advising the firm on real estate and financial issues. Mr. Weston added, that, "From the standpoint of networking, product innovation and creating new business, I think having a cluster of businesses in one location is important." The drawback, predictably, is rent. "I think," said Mr. Weston, "that both the lessee and the lessor will have to come together in the beginning to get tenants in." Forest City is also hoping to receive a lift from this year's Biotechnology Industry Organization convention, which will be held next month in Chicago for the first time. The convention is expected to attract about 20,000 attendees. The Skokie project is part of a general push by Forest City into the biotech market that began 20 years ago with the development of a 2.3-million-square-foot research park near the Massachusetts Institute of Technology in Cambridge. Over the last few years, the company has either developed or announced plans for similar projects in Philadelphia, Baltimore, Cleveland and Denver. "It's estimated that biotech will account for 15 percent of the G.D.P. by 2011," said Ms. Blakeley Farris. "It's a huge market. In the long term, we want to be in all the major life science markets." --~--~---------~--~----~------------~-------~--~----~ TELECOM-CITIES Current searchable archives (Feb. 1, 2006 to present) at http://www.mail-archive.com/[email protected]/ Old searchble archives at http://www.mail-archive.com/[email protected]/ -~----------~----~----~----~------~----~------~--~---
