Architectural Value Creation in Asset Reposition: The Case of Office-Lab Conversion

By: Liz Chen, PMP, LEED AP BD+C, ENV SP, a lab planner with HGA Life Science + Advanced Technology Group in San Diego, CA.

The growth of the life science ecosystem (e.g., bioengineering, pharmaceutical, biomanufacturing, contract research, and commercialization) translates to a serious demand for top-notched scientific labs and AI-enabled research facilities. Fulfilling the supply to match the stronger demand requires creative thinking and technical craftsmanship. Lab planners play a pivotal role in helping unleash and capture this transformative demand between life science and real estate. Our job is to turn lead into gold—reposition underutilized corporate offices/campuses into scientific uses to empower the ecosystem. Office-lab conversion gains significant traction due to a handful of virtuous attributes: preserve existing sites with new purposeful meanings, material savings in monetary terms (compare with a new ground-up in inflation hypes), high-tech assets upon completion, revitalize the economy, and stabilize job creation.

To fulfill the office-lab conversion, the design team begins with a meticulous study of the available project documentation, an extensive site walk, and field observations to comprehend the existing building and site conditions to ascertain the fundamental basis for new value creation recommendations. These are a series of preliminary steps to formulate a foresight between the existing building and the proposed upgrade. Construction and feasibility analysis is an imperative blueprint for defining the scope of asset repositioning and realizing the architectural value creation at a given timeframe and resources. The author categorizes the blueprint into three major sections: site utilities (SU), architecture and structure (AS), and mechanical, electrical, and plumbing (MEP) systems associated with corresponding details. 

Figure 1. Office-lab conversion aspects and corresponding details

Source: HGA. Property Assessment Report. June 2022 edited by Liz Chen

1. Site utilities (SU)

A lab design discipline allows architectural misjudgment far beyond its upgrade potential to jeopardize a long-term return and negate the value of creative thinking in the asset transformation process. In contrast, to avoid such negativity, a comprehensive construction feasibility analysis (CFA) is paramount for success. A humble transformation journey begins with site utilities in the following aspects: site plan, loading zones, service yard, standby power generation, waste management, hazardous material storage, and bulk gas services.  

Site plan: The site improvement plan includes a thorough analysis of grading and sloping, sediment and erosion control, stormwater management, roads and parking lots, sidewalks, and corresponding purposeful site elements, which facilitate a smooth circulation of people, goods and supplies, and vehicles.

Loading zones: Life science tenants (especially biomanufacturers) often require greater delivery frequency for products and supplies. Larger scale, temperature-controlled, and hazardous materials occurred relatively common in the logistics routine. In a collocated lab or science park, it is necessary to accommodate a pool of tenants’ demands in various forms and sizes. Thus, space and provisions for delivery trucks, and oversize/ overweight trucks with unusual volume (i.e., tank trucks) need to be incorporated. 

Service yard: Life science tenants have a higher demand for air compressors, vacuum pumps, boilers, and standby/emergency generators. The set of equipment is often located on the exterior, adjacent to the building in an enclosed yard, preferably under an unexposed shelter. Solid construction for sound attenuation and CMU walls are common enclosure features for a service yard. 

Standby/emergency power generator: A power outage or a sudden glitch is likely to wipe out months or years of scientific endeavors, triggering a disastrous delay in drug development and commercialization. Another set of purposeful-built power systems can minimize the encountering of unpleasant idiosyncrasies. Typical standby power systems support freezers, refrigerators, incubators, cold rooms/environmental chambers, analytical monitoring equipment, IT backup, vivarium, and mechanical systems for mission-critical purposes. 

Waste management: Due to the nature of experimental research, life science tenants often generate more trash, waste, and recycling than office tenants; therefore, by design, a larger space accommodation designated to waste and recycling is necessary. When third-party vendors come to collect the waste and recycle it, it often uses sizable vehicles for collection and removal. In consequence, space planning for waste management shall be evaluated. 

Storage of hazardous material: It is common to witness that the actual quantity of hazardous material used and stored by life science tenants exceeds the amount allowed within the primary structure. To better address or avoid the capacity issue, lab planners tend to deliberately plan prefabricated hazardous materials storage buildings to accommodate the excessive hazardous material.

Bulk gas services: Life science tenants often consume greater quantities of gas to support experimental research, such as nitrogen and carbon dioxide. The demand for bulky gas tanks and evaporative processors is consolidated in space planning and utilization. 

2. Architecture and structure (AS) 

Building shell construction: General information, such as the year of construction, number of stories, type of construction, and gross area should be collected and compatible with life science uses. Research-oriented tenants use the “B Occupancy” for laboratory space and “S-2 Occupancy” for storage spaces. Lab uses belong to ordinary hazards; therefore, the size and branch of fire sprinklers need to be evaluated and designed in particular by a licensed fire protection engineer.

Spacing: Labs need sufficient space for direct-ducted single-pass conditioning below the floor/ceiling structure to distribute mechanical systems, gas and water pipelines, and electrical systems. Hence, 14’-6” or a higher deck-to-deck height is desirable. As the preferred spacing for a lab module is from 10’ to 11’, the column spacing should be the multiplier of it. This spacing combined with a rectangular shape is ideal for lab layout with greater flexibility.

Hazardous material handling/ control areas: The building code defines the maximum allowable quantities of each type of chemical material class and hazard. Common design approaches in containing and controlling hazardous material are single control area, vertical separation, and horizontal separation.

Life safety/egress systems: In the tenant improvement process, evaluation of egress systems is a mandatory step to validate the maintenance of code-compliant status.

Service elevator: A service elevator is recommended for labs on the upper floors and is rated at least 5,000 lbs. It is ideal to locate the service elevator near the shipping/receiving area and allocate sufficient space in front of it for the convenience of maneuvering products and supplies.

Structure capacity: To provide flexibility for locating heavy equipment in the upper stories, the desirable floor loading capacity should be at least 125 PSF. Floor framing reinforcement is necessary when heavier and congregated equipment is situated on top. Vibration mitigation and minimization is a mandatory measure when labs carry vibration-sensitive equipment (e.g., high-resolution microscopy and incubator). The roof structure should be strengthened to accommodate upgraded rooftop utilities.

3. Mechanical, electrical, and plumbing (MEP)

Mechanical: Labs often require single-pass air for code and safety purposes. Airflow controls should be evaluated and considered for improved airflow performance and energy savings for each tenant, especially tenants with more than six chemical fume hoods. A 1.75-2.0 CFM/USF HVAC system is desirable for standard labs. Labs often install a new web-based Direct Digital Control (DDC) system with graphical interfaces and centralized panels with digital thermostats.  

Plumbing: There are two types of systems for lab tenants: portal and industrial. Each tenant will have one potable water connection from the building’s cold-water distribution piping with a potable water submeter. Industrial water would later be separated from the potable water after the passage of a submeter via a backflow preventer.

Electrical: Labs require a minimum of 30 to 35 watts/SF. The installation of interior LED light fixtures is recommended for the core and shell areas and restrooms. The LED strip light is a common lighting design practice for equipment rooms.

In brief, the article draws on three distinctive architectural value creation aspects and corresponding elements in achieving the desirable outcome in office-lab conversion. Meanwhile, we should never underestimate other decisive elements that are contributing to conversion viability and success. Other elements include but are not limited to owner circumstance, risk appetite, access to capital structure, existing office tenant’s condition, potential life science tenant’s situation, market headwind and tailwind, and the opportunity cost of prospective conversion formats and associated revenue stream and volatility.