Observation Labs to Bring Amenity-Rich Spec Suites and Build-To-Suit Space to Germantown

Sponsored by ECBuild / EwingCole

A new biotech life sciences building, poised to be a solution for a multitude of companies, is coming to Germantown.  Guardian Realty Investors has created Observation Labs, which will offer 67,300 square feet of life science space including spec suites and build-to-suit space when completed.

The Observation Drive buildings were initially constructed in the late 1980s for a local technology company.  When that company moved out, Guardian transitioned the buildings to multi-tenanted medical offices due to its proximity to Holy Cross Germantown Hospital.  Guardian is now converting 20400 Observation into a Class A life science building with a focus on research and development. 

“It’s a unique marrying of two different uses, but they are both in very high demand in Germantown,” said Tony LaBarbera, managing director at Guardian. “And so right now, we’re focused on the lab side of things where we’re investing to repurpose 20400 Observation to a biotech/lab use –  a higher valued use.”

When completed, the building will feature three lab spec suites ranging in size from 3,800 to 5,500 square feet in addition to 44,800 square feet of lab-capable build-to-suit space.  Guardian expects to deliver the spec suites in early spring 2023.  While these spec suites are great for newer companies coming out of incubator spaces—like the nearby Germantown Innovation—the building also offers optionality for companies that might need some move-in ready and some build-to-suit space.

“We have options for everyone in the market, and there’s been good demand for both, especially in Germantown,” said Chris Hanna, Senior Director of Finance for Guardian.

JLL, the leasing broker at Observation Labs, is already leasing the spec suites and talking with other larger users with a bit more time till occupancy.  The demand for move-in-ready spaces typically outweighs the supply, and 2022 has been no different.

“Typically the groups that gravitate towards these spec suites are those that have just received their funding or are spinning out of an incubator,” said Alden Stabb, Vice President at JLL. “They gravitate to move-in ready spaces because they need to be in yesterday.”

Each spec suite will consist of about 60% lab space with workbenches in place and 40% office space.  The spec suites will also have their own kitchenette, conference room and breakout room – all featuring best-in-class finishes.

“We really went above and beyond with the spec suites to make them a turnkey solution where everything is available that they need,” Hanna said.

To make the building ready for life sciences, Guardian gutted it and started from scratch, utilizing Class-A finishes throughout. They installed new HVAC and ran gas into the building for both heat and experimental purposes.  Guardian also installed a backup generator that can generate five kilowatts of backup power per square foot, which is essential for companies running experiments and relying on constant refrigeration.

Additionally, Observation Labs will offer several amenities to tenants, including a glass-front lounge with a large gourmet kitchen and private dining/lounge areas and two large conference rooms.  Next to that area will be the lab-specific amenities, including an advanced autoclave, glass wash, and flake ice machine, all of which are vital to life sciences companies.  Both the autoclave and glass wash will be serviced by a top-of-the-line deionized water system.  The system will also have a faucet that tenants can use when they specifically need deionized water for an experiment.

“We’ve seen more life science users gravitate towards fully amenitized projects, so when it comes to these spec suites, it’s a bonus for users if you can deliver common and shared amenities outside of their leased square footage,” said Stabb.

Observation Labs will offer abundant parking at a four per thousand parking count and an outdoor patio that provides the perfect spot for tenants to relax or eat lunch during the day.

Observation Labs is perfectly situated in the BioHealth Capital Region along the I-270 corridor with agencies like the FDA and NIH nearby in addition to life science incubators.  It is a prime place to do business.

“Our team loves the location – just off I-270 and squarely located in Germantown’s quickly evolving life science cluster,” said Stabb. “This asset is well positioned.”

The Montgomery County incubator is right next door as well, offering a great way to recruit talent and potential tenants. Observation Labs’ Germantown location will also help recruit talent from Frederick County.

“They don’t want to come all the way down to Shady Grove or all the way down to Bethesda,” LaBarbera said. “Our location really adds a draw to the workforce for these life science companies that will be looking for people.”

Guardian and JLL expect to lease the spec suites quickly and are open to speaking with clients about the larger build-to-suit space as well, which can be divided for multiple tenants or taken by one larger user.

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