Life sciences is a good recycler of real estate

Allergan’s big commitment to NJ; U. of Michigan converts pharma facilities to healthcare and education

With the heavy volume of M&A activity in life sciences, factories, labs and offices become so many chess pieces to shuffle around the board. To even greater effect, today’s biopharma industry is in the throes of a technological revolution, with new high-potency chemistry, biologic processes and genetic therapies come to the fore. For these and other reasons, the changing environment creates real estate assets that retain value, if the right owners and tenants can be found.

Two recent projects (both, coincidentally, involving Pfizer) are of note: in New Jersey, a combination of state incentives, investment by Lincoln Equities Group, a leading commercial real estate developer, and the desire of Allergan to consolidate offices throughout the region, has resulted in a project to refurbish old Pfizer (originally, Wyeth) offices in 5 Giralda Farms, near Madison, NJ. The facility, which is primarily office space, will get expanded garages, new lobbies (see photo) and other refurbishments. Allergan will be employing 1,800 at the site, and begin moving in in mid-2017.

“With its highly skilled pharma talent, research-focused universities, many leading health care systems, rich pool of biopharmaceutical innovators and access to capital markets, New Jersey remains a strong fit for Allergan, and we are proud to continue to be a part of New Jersey’s vibrant health care ecosystem,” said Allergan CEO Brent Saunders.

Meanwhile, at the U. of Michigan campus in Ann Arbor, pharma research facilities that were adjacent to the campus, built by Parke-Davis, had been shuttered by then-owner Pfizer in 2007. Over the past several years, the University has converted the facilities into the “North Campus Research Complex;” now, the last two buildings, constructed in 1960 and 1984, have been converted to labs for medical research and a medical library.

U-M will also repurpose lab benches, cabinets and other materials salvaged from areas of NCRC that it has already transformed. As a result, the creation of nearly 101,000 sq. ft. of renovated laboratory space will cost less than half what it would cost to build a new research building. It will even cost less than a typical lab renovation, while allowing the Medical School to grow its research base using its own financial resources. The 174-acre campus, with 28 buildings, had been purchased in 2009; now the university employs upwards of 2,700 staff there for a variety of academic functions.