Life Sciences, Labs and Medical Facilities

Life sciences construction has a bright future, even as the way these projects are built evolves.

That’s according to Raj Vora, life sciences core market leader at DPR Construction, who has spent nearly nine years with the Redwood City, California-based firm and more than two decades in the AEC industry. Vora has worked on a variety of life sciences projects, focusing on manufacturing, cell and gene therapy, bio-containment and research facilities. 

The life sciences segment makes up 20% of DPR’s revenue and the firm continues to be bullish about the sector, despite some cooling of the construction boom that followed the onset of the COVID-19 pandemic.

Here, Vora talks with Construction Dive about which life sciences sectors are poised to grow, the impact of AI and changing project delivery methods.

This interview has been edited for brevity and clarity.
 

CONSTRUCTION DIVE: There have been some signs of the life sciences construction slowing down in the past year. How are you feeling about the sector? 

RAJ VORA: Quite the opposite, large scale manufacturing is on the rise globally. If anything has slowed down, it's the developer-led tenant lab market where vacancy rates continue to be elevated.

Where do you see the most growth in the near future? 

Near term is going to be increased manufacturing capacity for weight loss drugs as this market is growing exponentially. I also think compounding pharmacies will be on the rise to help alleviate the growing costs associated with brand name drugs.

How have you seen the life sciences building industry change over your career? 

Finances are increasingly tightening — when I started, money in the sector was being spent like it was infinite, as biotech was growing at an intense rate. 

Additionally, almost all projects were design-bid-build, but are now trending towards more and more EPCM and design-build deliveries. 

The other major trend is that many A/E or consulting engineering firms have transitioned from pure design houses to now having a construction arm in hopes of providing full-service turnkey solutions.

What tech trends are most shaping the sector? 

We can't talk tech without talking AI. I just read an article about how AI is being used in cleanrooms for predictive maintenance. 

AI is going to continue to grow in the sector both from the design and construction side to owner operations. It will be interesting to see which jobs stay human-based versus AI.

Tell us about a life sciences project you worked on that you’re especially proud of.

I am proud of the Human Genome Sciences Large Scale Manufacturing project in Rockville, Maryland, which consisted of bioreactors used for monoclonal antibody production. This greenfield project went from groundbreaking to batch runs in 24 months both under budget and ahead of schedule. 

It was the most challenging yet exciting bulk manufacturing project I have ever worked on. Because it was bulk manufacturing, there were significant miles of hygienic piping along with the associated process equipment including seed trains, media and buffer tanks, water for injection and clean steam, diafiltration and tangential flow filtration skids, centrifuges and ethanol-based chromatography. 

The design, construction and owner teams all had great relationships so the morale during the project was always high, making the project an enjoyable success.

The construction boom in the life sciences sector appears to be cooling off, according to a CBRE trends report.

Construction activity in the sector surged following the onset of the COVID-19 pandemic, as demand for lab and research and development space skyrocketed. Net absorption peaked in the third quarter of 2021, driven by a rush to build new facilities, with developers delivering millions of square feet to meet this demand, according to the report.

Now, contractors are likely seeing fewer speculative projects, as developers increasingly wait to secure tenants before moving forward with new construction projects due to rising costs and oversupply.

That is leading to a significant slowdown in new life sciences construction activity, according to CBRE. Life sciences space under construction peaked at nearly 40 million square feet in the second quarter of 2023, but has since dropped to around 21.2 million square feet in the second quarter of 2024.

About 72% of that space under construction remains unleased. That shows the ongoing oversupply challenge in the sector, said Matt Gardner, CBRE Americas life sciences leader.

“Cooler heads are prevailing,” said Gardner. “Lab landlords are returning to the pre-2021 approach to development, reflecting the realization that the temporary peak was an aberration, not a new normal.”

Rising costs are adding additional pressure too, according to Gardner.

Life sciences construction costs have surged by 20% to 25% since pre-pandemic levels. That reflects both higher material prices and increased building expenses, especially for specialized spaces like cleanrooms and vivariums, according to the report. Those costs have jumped as much as 50%.

Contractors also face longer lead times for critical specialty equipment, which have extended by 10 to 20 additional weeks.

Office-to-lab conversions, once a key driver of activity, have also declined, according to CBRE.  After peaking at 35% of all life science construction projects in the first quarter of 2022, conversions dropped to about 20% of activity in the second quarter of 2024.

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Dive Brief:

• The New York City Economic Development Corp. has released a request for proposals for a construction manager to oversee the first phase of the Science Park and Research Campus Kips Bay project, according to a news release. The RFP will close Tuesday, July 16.
• The $1 billion construction contract includes the transformation of Hunter College’s Brookdale campus in Manhattan into a life sciences innovation hub. The NYCEDC expects construction to begin at the end of 2025 and project completion by 2031.
• The redevelopment, set to transform an entire city block into academic, public and research facilities, recently entered the Uniform Land Use Review Procedure, a standardized process for public review of applications affecting the city’s land use.

Dive Insight:

The SPARC Kips Bay project, located near the East River, forms part of a broader strategy to improve New York City’s waterfronts, transforming them into hubs of innovation and economic activity, said New York City Mayor Eric Adams in the release.

The SPARC Kips Bay redevelopment will feature new facilities for Hunter College School of Nursing, the CUNY Graduate School of Public Health and Health Policy and the Borough of Manhattan Community College’s healthcare programs.

Additionally, the project will include an ambulatory care center, a new forensic pathology center and nearly 2 acres of public improvements, including a new ADA-accessible pedestrian bridge at 25th Street.

‘Harbor of the Future’

The SPARC Kips Bay project aligns with other life sciences developments being planned in the Kips Bay neighborhood, such as Innovation East, which will replace a former public health lab. 

Currently in the early stages of public review, the plan calls for 500,000 square feet of commercial life sciences space, entrepreneurial research labs for NYU Grossman School of Medicine and a multipurpose collaboration space. 

The project, developed by Taconic Partners and DivcoWest, plans to incorporate LEED-Gold standard designs and flood-resilient systems.

These projects fit into Adams’ “Harbor of the Future” plan, which envisions New York City’s waterfronts as centers of innovation and economic growth. Both projects are key initiatives in New York City’s goal to create 10 million square feet of life sciences space by 2030, according to the release.

The Department of Energy’s Office of Science tapped Greeley, Colorado-based Hensel Phelps as the construction management/general contractor for Oak Ridge National Laboratory's second target station project, according to a June 26 news release. The project will cost between $1.8 billion and $3 billion, per a 2023 DOE Office of Science fact sheet.

The project will extend and complement the neutron capabilities of the existing first target station to enable breakthroughs across the physical and biological sciences.

Overall, the builder expects more than 30 trade subcontractors to contribute, with more than 350 tradespeople expected during the peak of construction over the next eight years, according to the release.

The facility will be designed to meet the DOE High Performance Sustainable Building Guiding Principles, which include:

• Employing integrated design principles.
• Optimizing energy performance.
• Protecting and conserving water.
• Enhancing the indoor environment.
• Reducing the environmental impact of materials.
• Assessing and considering building resilience.

The overall CM/GC contract will include both the preconstruction and construction phases, per the news release. Hensel Phelps is currently in the preconstruction phase, which includes design reviews, market analysis, value engineering and developing a master project schedule.

The project comes during a year where Hensel Phelps saw a broad leadership change — on Jan. 8, the company named Brad Jeanneret as its new president and COO.

A recent lab project in New York City showcases the importance of collaboration between contractors and architects.

Early on, New York City-based Talisen Construction worked with architect Perkins + Will on the creation of a wet lab space on the 7th floor of the Hudson Research Center project in Manhattan developed by Elevate Research Properties, the life sciences subsidiary of Taconic Partners. This early involvement enabled the team to identify cost and time savings opportunities, particularly through value engineering, according to Michael Figliolia, Talisen director of construction.

“By defining roles and responsibilities early on and practicing active listening, we effectively addressed concerns and made informed decisions,” Figliolia told Construction Dive. “Documenting decisions and promptly addressing issues further ensured that the project proceeded smoothly.” 

Talisen is now working with Perkins + Will on a follow-up project in the same building, to be completed later this year. 

Here, Figliolia talks with Construction Dive about the importance of collaboration and tech solutions for keeping team members on the same page.

Editor’s note: This interview has been edited for brevity and clarity.

CONSTRUCTION DIVE: Tell us about the Hudson Research Center project that you completed with Perkins + Will.

MICHAEL FIGLIOLIA: The 7th-floor wet lab pre-built laboratory project, which built on our previous projects at this location, heavily relied on technology such as BIM to optimize the project in the early stages. 

Early on, the digital modeling functionality identified opportunities for cost and time savings by identifying potential rework scenarios that would have been difficult to pinpoint without these tools.

For instance, project players leveraged 3D scanning to create BIM models for the plumbing and HVAC portions of the project. This comprehensive surveying and modeling process fostered collaboration within the design team and guaranteed accurate placement of building systems. 

Team members maintained clear and consistent communication via Procore software and regular meetings and updates helped them stay on track. Our Bid|Buy|Build model provided a single point of contact, simplifying communication and decision-making.

In addition to technology, what are some other ways that you foster a relationship with architects?

There are several essential components to fostering a strong architect-contractor relationship. The first is early collaboration. Contractors should be engaged early in the design process to align objectives and identify potential issues before they become problems. 

This form of value engineering helps set realistic expectations for the client while allowing the contractor to discover areas where costs can be cut without surrendering quality. It also helps prevent schedule disruptions that could have been easily prevented.

Then you need to define roles. Clearly outline the roles and responsibilities of each team member to avoid misunderstandings and ensure accountability.

Active listening is also critical. Both parties should practice active listening to understand each other's perspectives and address concerns promptly.

Other important aspects to remember are providing consistent, regular updates, documenting decisions and addressing any problems that arise promptly so they don’t escalate. 

You mentioned your Bid|Buy|Build approach. How does that work?

Construction projects are often marred by information gaps that adversely impact schedules and budgets, leading to significant cost overruns. Talisen has eliminated the barriers between estimating departments, procurement teams and construction offices to prevent the knowledge loss typically experienced during inefficient team hand-offs. 

Our Bid|Buy|Build approach ensures a superior product, with a dedicated project manager serving as the client’s sole point of contact throughout the project — an information hub and single point of accountability from initial budgeting to project closeout.

What challenges are you seeing in your markets right now?

We're seeing several challenges in our markets right now, including supply chain disruptions, fluctuating material costs and labor shortages. These issues can lead to project delays and increased costs for the contractor. 

Additionally, navigating evolving building codes and regulations, especially in the healthcare and life sciences sectors, adds complexity to project planning and execution.

McCarthy Vaughn Partnership broke ground in October on a $5 billion pediatric health campus in Dallas that will replace the existing Children’s Health complex, the hospital said in a release.

The massive project will significantly expand inpatient, surgical and ambulatory capacity in order to meet the needs of the rapidly growing North Texas region, according to the Oct. 1 news release. With the pediatric population expected to double by 2050, there is an urgent demand for advanced pediatric healthcare in the area. 

McCarthy Vaughn Partnership — a joint venture of St. Louis-based McCarthy Building Cos. and Houston-headquartered Vaughn Construction — is the main builder and the construction manager at risk for the project, Children’s Health spokesperson Virginia Hock said in an email.

The team will build the new Children’s Health campus, which entails 4.7 million square feet of construction with a new pediatric hospital as its centerpiece. The hospital includes two 12-story towers and an eight-story tower, along with the broader care site. 

Fort Worth, Texas-based Post L Group is the main teaming partner, Hock said, and HKS of Dallas and Chicago-based Perkins & Will are the primary architectural firms. Trade contractor packages will be bought out over the next 15 months, according to Hock.

The project’s 552 beds will increase the inpatient capacity at Children’s Health by 38%, and the hospital will have 15% more emergency department space and 22% more operating room space, plus room for future expansion, per a news release from McCarthy. It includes amenities such as playrooms designed for different ages and interests, rehabilitation and therapy gyms for patient families, pharmacies, coffee shops and a food hall.

A new fetal care center will provide complex maternal and fetal healthcare, and will be accessible by a new bridge connecting the reworked campus and UT Southwestern’s William P. Clements Jr. University Hospital. The project will also create a hub for academic research, training and the development of life-saving technologies.

Substantial completion is expected in the next six years, according to Hock.