Once-bustling office buildings are now grappling with record vacancies, as the stickiness of remote work is changing the way we think about the asset class. In response to this shift, a compelling opportunity emerged in the form of office-to-lab conversions.

“Postpandemic, many office buildings remained partially vacant as work-from-home policies have allowed more flexibility and tenants began rightsizing their space,” said Austin Barrett, executive vice president & North America life science practice lead at Savills. “Landlords seized this lucrative opportunity to repurpose existing buildings that have the infrastructure to support lab conversions as they attracted higher rents.”

Cities such as Boston, San Francisco and San Diego—known for their biotech and pharmaceutical industries—are leading the charge, but the trend is quickly spreading to other areas. Mark A. Sullivan, architect & partner at JZA+D, noticed a surge in biotech research space demand along the New York City-Philadelphia corridor, driven largely by the concentration of research universities and entrepreneurial ventures in this region.

The motivations behind the office-to-lab conversion trend are clear and compelling.

See the full Commercial Property Executive interview here.