Free Newsletter
Colorado is home to 720 life sciences companies and organizations that directly employ 32,089 people earning an average annual salary of $96,460 for a total annual payroll of $3.09 billion, according to the Colorado Bioscience Association. And at 33 facilities, it also has the largest concentration of federal laboratories in the United States.
“We’ve seen the growth happening over the last five years,” said Elyse Blazevich, president and CEO of the Colorado Bioscience Association. “Colorado historically has been strong in medical devices and diagnostics, and we’re continuing to see growth in that segment. Now we’re starting to see more cell and gene therapy growth, and Fitzsimons is leading many of the efforts in this area.”
READ — Fitzsimons Innovation Community: Research, Tech Transfer and More
That growth has obvious implications for commercial real estate. Life science companies are searching for about 1.2 million square feet of space in a market that has just 87,821 square feet available.
The vacancy rate for metro Denver’s approximately 4.8 million square feet of space is 4.3%.
“In Boulder, up until the past few years, life science real estate transactions were more viewed as industrial,” said Erik Abrahamson, senior vice president with commercial real estate firm CBRE which focuses on life sciences. “They had low lease rates, low tenant improvement (TI) allowances, and the landlord expected tenants to put all the money into the space.”
But that’s changed. Now, developers recognize the value of life science tenants and are sinking money into projects designed specifically for them.
Developers are building projects in Denver’s north metro area specifically designed for life science companies.
Lincoln Property Co. is building a 450,000-square-foot life sciences campus at 235 Interlocken Blvd. in Broomfield. Three of the four buildings at CoRE — Colorado Research Exchange — will range from 110,000 to nearly 200,000 square feet. The fourth 15,960-square-foot building will house the campus’ amenities, including a fitness center, locker rooms, bike storage, a tenant lounge with fireplace, an outdoor terrace, state-of-the-art conference and training center and a food market.
PMB and Montgomery Street Partners are building a $280 million life sciences campus in downtown Superior — the first purpose-built life sciences campus in Boulder County. Plans call for three office/lab buildings ranging in size from 85,000 square feet to 150,000 square feet and a fourth building with ground-floor retail and structured parking.
Last year, Medtronic broke ground on a 42-acre campus in Lafayette that will be a hub for research and development. About 1,100 employees will work in two five-story buildings totaling more than 400,000 square feet.
Others are converting existing properties into spaces life science companies can use.
Koelbel and Co. is conducting an extensive renovation of a former 80,000-square-foot Kohl’s building at 191 W. Dillion in Louisville for Biodesix Inc., a data-driven diagnostic testing solutions company dedicated to improving medical care for patients with lung disease.
Real estate company Blackstone Inc.’s BioMed Realty Trust unit paid more than $600 million for Flatiron Park, a 1 million-square-foot, 22-building life sciences campus in Boulder. It plans to invest about $200 million for capital improvements to the campus.
READ — Lab Digitalization: 5 Key Trends to Watch
Companies are drawn to Boulder County because of its educated workforce and its burgeoning tech community, Abrahamson said.
“Life science follows tech, and we’re seeing that firsthand,” he said. “Two years ago, we started seeing the first life science-focused real estate developers building out these facilities on spec and offering TI packages that were meaningful enough to reduce the cost.
“Now they’re getting leases signed before the space delivers because there’s a lot of demand and not a lot of places for these companies to go.”
Abrahamson said Colorado has the opportunity to build relationships with West Coast companies similar to how the Research Triangle Park in North Carolina — the largest research park in the United States — has attracted researchers and companies from the Boston and Cambridge areas of Massachusetts.
“They’re doing the research, but they need the facilities,” Abrahamson said. “Fitzsimons and Boulder can accommodate this.”
But who are the forces behind the growth?
Growth in Colorado’s life sciences industry is being fueled by its success in raising funds, access to an educated workforce and research coming out of the state’s universities.
The state’s life sciences ecosystem raised $2.4 billion in 2021, a record for the fast-growing community and double the $1.2 billion that companies raised in 2020. The state has come a long way from the 2014 to 1016 period, when the eight-state mountain region struggled to hit the $1 billion mark.
Funding comes in many forms. About $450 million of the 2021 funding came from venture capitalists, while federal grants accounted for more than $500 million with the largest recipients of the grants being the University of Colorado, Colorado State University and the companies that have spun out of the institutions, said Elyse Blazevich, president and CEO of the Colorado Bioscience Association.
The state of Colorado also awarded $8 million in Advanced Industries Grants to 31 life sciences companies and university researchers in 2021.
Life science companies also have raised money through initial public offerings and special purpose acquisition companies (SPACs). Edgewise Therapeutics Inc., for example, raised $250 million in its IPO, and SomaLogic got $630 million through a SPAC.
As Colorado’s life science industry continues to boom, companies are expanding and relocating here — and that’s resulting in demand for lab space and clean manufacturing space that developers are responding to.
Cancer therapy company ViewRay announced Denver as its new headquarters in August, and Virta Health, a healthtech unicorn, announced in October that it would relocate from San Francisco to Denver.
“There’s certainly a lot of discussion in the ecosystem about the growth and momentum and the need for lab space to grow at a comparable rate to make sure we can serve those companies’ needs,” Blazevich said. “We’re seeing a large number of investments to solve those challenges.”
While the Boulder area and Fitzsimons Innovation Community have the largest concentration of life sciences companies, Blazevich said businesses are expanding across the Front Range.
Terumo Blood and Cell Technologies, for example, recently opened a second manufacturing facility in Douglas County. Production at the $250 million, 170,000-square-foot plant will serve plasma collections customers with single-use collection sets for the recent Food and Drug Administration (FDA)-approved Rika Plasma Donation System.
Margaret Jackson is an award-winning journalist who spent nearly 25 years in the newspaper industry, including seven years as a business reporter for The Denver Post covering residential and commercial real estate. She can be reached at [email protected].