MEP Expertise Leads to Lab Conversion Success
April 20, 2022
We’re no stranger to building complex products from the ground up. But some of our finest opportunities come from construction projects that involve existing spaces.
It has become common practice for developers to convert empty office spaces into lab facilities for science and technology companies. In many markets, the demand for leasable lab and technology space is more than the local markets can accommodate. Special considerations are required for this type of construction, and Brasfield & Gorrie is uniquely qualified because of prior project experience. One of the most essential components of a successful conversion deals with expanding the mechanical, electrical, and plumbing (MEP) systems.
Conversions have become increasingly popular in North Carolina’s Research Triangle Park (RTP), one of the top science and technology hubs in the country and a premier global innovation center. The first such project completed by Brasfield & Gorrie’s Raleigh office was the Discovery 4 Speculative Laboratory in Morrisville, North Carolina. After the property sat vacant for years, Longfellow Real Estate Partners acquired it and made it part of their five-building Discovery campus in RTP. Because the core and shell of the building were already in place, our project team was able to focus on the MEP systems and expedite the conversion process to get the building to market in six months.
“We can move rapidly on conversion projects because the risk portfolio is smaller. We do not have to contend with excavations, weather, or sitework,” said Senior Project Manager Taylor Willis. “These spaces are getting snatched up by tenants as fast as we can convert them. The biggest risk is procurement, but the tacit knowledge gained by doing a few conversions allows us to keep owners and tenants informed and our projects to be highly efficient.”
Converting an existing office space to lab space is more complicated than changing the sign above the door. Lab spaces require more robust MEP systems due to factors like air exchange rates, which make temperature and humidity control more challenging. These complex MEP systems can take up more space than they would in an office building—and they typically account for between 50 and 60 percent of the cost of a lab build. But there’s a payoff: Lab spaces fetch a higher price per square foot on the real estate market, and they are in high demand.
These hefty MEP systems are familiar to Brasfield & Gorrie because they typically resemble those required for a healthcare facility. With decades of experience across hundreds of healthcare projects, our team is readily equipped with the knowledge and expertise required to tackle complex lab conversion projects.
“Our teams know how to efficiently build operating rooms, pharmacies, and blood labs within occupied hospitals, all while abiding to stringent specifications and infection control requirements,” Willis said. “We can easily apply that transferrable knowledge to a lab conversion project. That road is clear for us.”
Since our work on the Discovery 4 Speculative Laboratory, we’ve continued to see increased demand for these conversion projects. In 2020, as construction began on the Roxboro at Venable Center project in Durham, North Carolina, developer Trinity Capital Advisors anticipated a growing shift to at-home employment. This meant there would likely be less demand for an office space in downtown Durham. Lab facilities, on the other hand, would attract companies whose employees require a designated workspace to accomplish their tasks, and there’s a high demand for such spaces in the area.
“Our clients are knowledgeable about the market in RTP, and they know that lab space is in high demand. They recognize that first-to-market is important,” said Senior Project Manager Matt Ramey. “Our ability to inform our clients regarding lead times and construction schedules allows them to pursue potential tenants with confidence and sign lease deals at risk knowing that they will be occupying the space on time.” Brasfield & Gorrie is currently working on multiple science and technology projects in RTP for Trinity Capital, including Southport Business Park Speculative Laboratories and the sPARK Life Science Campus. We’ll soon begin construction on Longfellow’s Discovery on Watkins Road campus as well. While RTP is positioned to remain a hub for these projects, office-to-lab conversions are expected to continue trending upward across the country. And thanks to our expertise in relevant MEP systems and our widespread market footprint, our project teams are ready to take on the next opportunity.