Philly Life Science Real Estate Projects Hit More Milestones
By Mark Terry
May 19, 2023
Life science construction projects in the Philadelphia region continue to boom. A recently announced project and a major milestone announced from a second project highlight the growth across the ecosystem.
NexPoint Acquires 2 Philly Properties
NexPoint acquired two life sciences industrial properties in Philadelphia from Frontida Biopharm. Frontida is part of the Adare Pharma Solutions group, a contract development and manufacturing organization (CDMO) that targets oral dosage forms.
NexPoint Life Sciences II DST, a Delaware statutory trust, acquired the properties indirectly. It is looking to raise $42 million in equity “from accredited investors via a private placement offering,” according to a press statement.
The two properties combined total almost 18 acres and more than 250,000 square feet where Frontida Biopharm will continue to reside. Property number one is made up of R&D, production, and warehouse facilities. The annual manufacturing capacity clocks in at three billion tablets and capsules. Property number two has distribution facilities and packaging capacity for the annual production of four billion tablets and capsules. It also has the potential for expansion on its 12-acre campus.
“As the life sciences industry continues to evolve, we see increasing demand for quality properties to support companies across all stages of innovation,” said Matt McGraner, NexPoint Real Estate Advisors’ Chief Investment Officer, in a press statement. “We are committed to expanding our footprint in this critical sector with modern facilities that help life sciences companies do their best work.”
Breakthrough Properties Arranges $130 Million Construction Financing
A year ago, on May 16, 2022, Breakthrough Properties announced the acquisition and development of the 2300 Market Street block in Philadelphia’s Center City district. Breakthrough plans to develop the location for more than 200,000 square feet of life science space. It acquired the property in December 2021.
A year later, in mid-May 2023, the company reported that it had arranged $130 million in construction financing for the development of the site via D2 Capital Advisors.
The site is in the center of the Market Street Corridor near Amtrak’s 30th Street Station and the University of Pennsylvania. The primary life science building will have eight stories with “flexible open floor plates tailored to Philadelphia’s rapidly expanding life science tenant base,” according to a MyChesCo article.
“D2’s local expertise and market insight were extremely valuable to Breakthrough throughout both the acquisition and financing process,” said Dan Belldegrun, CEO of Breakthrough Properties in the article. “Their team’s flexibility, creativity, and understanding of our business helped make it possible for us to obtain financing in this complex lending environment.”
This is Breakthrough’s first project in Philadelphia. Other major projects include The 105 by Breakthrough in Boston, which houses CRISPR Therapeutics’ U.S. research facility, and the 10-acre Torrey View by Breakthrough campus in San Diego, which will be home to Becton Dickinson’s BD Biosciences division. Outside the U.S., Breakthrough has developed Trinity House in Oxford, England, and The Vitrum Building in St. John’s Innovation Park in Cambridge, England.
Construction has begun in Philadelphia with plans to be ready for tenants in the summer of 2024.
All Part of a Growing Ecosystem
A recently issued 2023 U.S. Life Sciences Outlook report by global commercial real estate services and investment firm CBRE found that Philadelphia ranks #8 in the country with 9,665,840 square feet of life sciences inventory. Its vacancy rate is 10.1% (compared to Boston/Cambridge’s 3.0% and Chicago’s whopping 29.6%). The city has 2,767,460 square feet of life science space under construction, bringing Philadelphia’s life science construction to #4 in the country.
Examples include Integral Molecular cutting the ribbon on its new headquarters, the first tenant in Philadelphia’s One uCity, Spark Therapeutics continuing its expansion at Discovery Labs in King of Prussia, and bioMerieux subsidiary Invisible Sentinel signing on to take a significant portion of 1201 Normandy Place in Navy Yard.
In early April, Philadelphia-based VintaBio, a contract development and manufacturing organization (CDMO) focused on cell and gene therapies, came out of stealth mode. The company had just completed a new 22,500-square-foot manufacturing facility at the Navy Yard. And Roquette, headquartered in La Madeleine, France, recently cut the ribbon on its new Pharmaceutical Innovation Center located near Philadelphia. The new $25 million center will complement the company’s existing innovation centers in France and Singapore to offer services and training to pharma companies in the U.S.
Benjamin Doranz, Co-Founder, President and CEO of Integral Molecular, told BioBuzz earlier this year, “If you look at the per-square-foot cost of rent, you can get lower in the middle of nowhere, but then you’re not surrounded by the resources, the people, the access to the universities, the environment, the support systems that are in place here to make you successful.”
And life science developers are busy helping make that possible in the Philadelphia region.
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Mark Terry is a freelance writer, editor, novelist and ghostwriter. He holds a degree in microbiology & public health and spent 18 years in infectious disease research and clinical and research genetics prior to his transition to a writing career. His areas of expertise include biotechnology, pharma, clinical diagnostics, and medical practice management. He has written literally thousands of articles, as well as market research reports, white papers, more than 20 books, and many other written materials. He currently lives in Michigan with his family.
