Anyone in the life science acquisitions space currently? If so, what are your thoughts. I keep seeing job postings pop up, and the sector definitely interests me, but unsure if I would be pigeonholing myself in a specialized and potentially downward trending sector.
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Not in the space but lent to the space not too long ago
the landscape is dominated mostly by institutional firms due to the high amounts of $ needed to build out and lease space. From that perspective you would likely be working at a somewhat reputable shop, so that’s good.
imo the outlook for the sector is not that great, but if you are working on conversions it may be a great learning experience.
re:outlook - Covid happened and life sciences became the hot space. VC funding was high and increasing rapidly YoY. Lots of startups spinning out of universities and suburban flex buildings started to be converted to gmp or dry lab space in anticipation of boom times. Then Covid subsided, fed hiked rates, and vc funding dried up. Lots of space sitting vacant. Barely any leasing.
Also probably wouldnt be getting a lot of reps on the acquisitions front for the next 2-3 years at least
What’s the underwriting process? Argus dumps into excel model? I assume it has to be similar to traditional office, maybe heavier TIs.
Same as office just bigger numbers
Short term: over built in core markets with anemic leasing activity due to funding constraints.
Long term: aging population and natural extension of the tech industry make it an attractive sector if you have patient capital.
Be weary of life science conversions. Many attempted this when it was the flavor of the week and the reality is that converted space cannot compete with the new Class A space that Landlords need to lease over the next cycle. The physical characteristics of the building are crucial in assessing if it’s a good deal. A good LS deal always needs outsized power and specialized HVAC systems (single pass air, etc). Also, think about the type of tenant you’re going after (just like office). Will it be incubators, graduate space, established companies? All will have vastly different needs and requirements. In sum, I’m bullish long term on the life science in core markets ( ie - Boston, San Diego, San Francisco) but be sure you understand the asset class or it’s a good way to get hosed. You can always spend the capital to convert from office to lab but it almost never makes sense to change course and do the opposite once the improvements are in.
Yeah the bozos who did the conversions are going out completely sad.
Doesn’t take a Sam Zell to realize they’re fucked when the class A buildings can’t even lease up.
RIP IQHQ as well
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