Bill Gates-Backed Bioscience Startup Inks Lease at Hudson Research Center

The new headquarters will house researchers developing an alternative to palm oil — an ingredient in more than half of consumer products and a cause of greenhouse gas emissions, according to Bloomberg. 

C16 Biosciences will move into 20,000 square feet of pre-built lab and office space on the seventh floor of the building at the end of this summer or early fall. Asking rents were in the mid- to high-$90s on a triple-net basis.

C16 Biosciences’ move into the seven-year lease from an NYU Langone-run biotech co-working space in Hudson Square comes after the company closed on a $20 million, Series A investment round led by Gates’ Breakthrough Energy Ventures last year. Its expansion is another marker of the booming life sciences sector in New York.

“The West Side of Manhattan, where this building is located, is one of the hottest clusters for life science in New York City,” Taconic Partners Executive Vice President Matthew Weir told Commercial Observer. “We have the flexibility to accommodate a variety of users and I think that this proves it. … The building is creating best-in-class spaces that are flexible in their design engineering, as well as lease terms and things of that nature, to draw tenants that have different operations.”

Weir said Taconic was working to lease the remaining 80,000 square feet in Hudson Research Center and had received a lot of interest, as New York begins to gain a foothold as a life sciences hub. Silverstein Properties and Taconic were represented by Jonathan Schifrin and Alessio Tropeano of CBRE and Weir in the deal. C16 Biosciences was represented by John Isaacs of CBRE.

“We were thrilled to be able to represent C16 in relocating to 619 West 54th street, which is building a thriving life science ecosystem,” Isaacs said.

The New York City Economic Development Corporation was also excited by the move, with the acting chief linking a post-pandemic recovery to a strong life sciences sector.

“Building a successful recovery means ensuring the life science sector is equipped with the greatest potential for cutting-edge technologies and treatments for New Yorkers,” Rachel Loeb, acting president of the city’s EDC, said in a press release. “Companies like c16 Bioscience Inc. establishing its headquarters here is an example of the strength of the life sciences ecosystem and the city’s potential as a biomanufacturing hub. With a diverse talent pool, and advancements in technology, New York City is uniquely positioned to grow as a global leader in life sciences research and innovation.”

The Office of the Future is Outdoors

Landlords and designers are adding more outdoor space to office buildings, so employees can actually work outside.

Office life is about to move outdoors.

In buildings across the country, new and renovated offices are being designed to include more options for workers to get away from their desks and go outside. According to designers, developers, and landlords, it’s an emerging trend that could shake up the way workplaces look and feel for years to come.

“Access to daylight, good fresh air—those kinds of things are really tangible to the tenants,” says Marc Fairbrother, vice president of the architecture firm CallisonRTKL. “We are headed in those directions where it’s more about the user experience than efficiency and the cost of the product.”

CallisonRTKL has several projects in the works that are putting a premium on outdoor space. Common building amenities such as fitness centers and ground-floor cafés are being augmented with new spaces for outdoor breaks and even outdoor working. One project currently in the works, a new office building in Arlington, Virginia, for the global construction company Skanska, includes a variety of outdoor spaces throughout the building. At street level, there’s a quarter-acre parklike space with seating and shaded areas that can be used by the public or by office workers. On the roof, there’s a large patio space, with various seating options that can function as lunchtime getaways, informal working areas, or spots for open-air presentations. The roof also includes an enclosed central conference room that can host both formal board meetings and after-hours cocktail receptions.

They even added outdoor spaces on a part of the office that has traditionally been unpopular. “The second floor, which is always the hardest to lease in office space, is where we put the terraces,” says Fairbrother.

Another of the firm’s projects, an office building in Tulsa that’s slated to open in 2023, was designed to include terraces on every floor. CallisonRTKL principal Dallas Branch says it’s a new approach, and one that the designers had to tinker with before it felt right. “We’re not used to seeing that in offices. When we first laid it out, it seemed like a residential building because it looked like we had balconies everywhere,” says Branch. “We had to tweak the design a bit to keep that office building look.” As a result, every floor will have about 1,500 square feet of terrace space for the tenants.

The move toward the outdoors has been underway for years, but unlike in the past, this new generation of outdoor spaces is less about escape than about adding new types of spaces for people to work and interact in.

“In the early days, these were meant more for social gatherings, but you’re starting to see even the idea of outdoor conference rooms,” says Matt Weir, of the New York-based developer and landlord Taconic Partners. “You’re laying out furniture, you’re creating privacy with greenery, you’re creating alcoves where you can put a table and folks could have a board meeting or a presentation.”

“You’re seeing the office layout function migrate to these outdoor spaces,” says Weir.

Taconic is now finishing up several projects in New York that embrace this. One is the renovation of 440 9th Avenue, a building from 1927 with distinctive wedding cake-style setbacks on its upper floors. To create more of a connection to these preexisting outdoor spaces, Taconic has added NanaWalls, sliding and folding walls that can be opened.

Adding these kinds of spaces can be expensive, Weir says. For new rooftop spaces, elevator shafts have to be extended, as do emergency stairwells to meet fire and safety codes. New shading and planters may also require structural renovations to support the additional weight. But in many instances, the costs of adding these spaces can be offset with higher rents. “The buildings that provide these spaces certainly carry a premium versus buildings that don’t,” says Weir. “And I think it’s becoming one of those standard, check-the-box things that tenants are looking for. If you’re not able to provide this, you’re at a competitive disadvantage.”

In expensive markets such as New York, landlords understand that these kinds of spaces are appealing to workers and also to the companies that are trying to attract and retain them. With office vacancy rates higher than normal during the pandemic, landlords and building owners know they need to try harder to lure in tenants.

Though COVID-19 has changed the way a lot of people think about office environments, Weir says this trend isn’t necessarily a pandemic reaction; it sometimes reflects a new way of working. “We are doing outdoor spaces in almost every single one of our projects. That’s how important we believe they are,” he says.

Others say providing these spaces is just a new part of doing business. “Some of this stuff may be table stakes,” says Nadir Settles, managing director for the real estate investment manager Nuveen Real Estate. “What would you rather have, an empty building or a building that you’re putting some costs into but you’re filling?”

One of the company’s New York buildings is in the process of adding this kind of outdoor amenity. On its 22nd floor, the building at 730 Third Avenue will soon have a 7,000-square-foot landscaped terrace. Designed by the global architecture firm Gensler, it’s intended to provide space for events and cocktail hours, but also what Settles notes can be a third place.

Settles expects new buildings to have these kinds of spaces incorporated into their designs going forward. For existing buildings, those with outdoor spaces are likely to be more popular with both tenants and landlords. “Of course, if we’re out doing an acquisition right now, and we can buy a building with no terraces or a building with terraces, and we have to pay a little more, we would do that because that’s what tenants are going to want, and you can fill that building,” says Settles. “I think the bar has been raised.”

As for CallisonRTKL, Fairbrother says he’s hoping to do some post-occupancy analysis of new buildings with outdoor spaces to see exactly how they’re being used, and whether they have any impact on worker productivity.

“That would be the real meaningful thing, is to prove it economically. Yes, you spent some money to do this, you created a better environment, and see here the payoff is better productivity,” he says. “I think we have a little more work to do on this and it’s going to evolve, but I think we’re going to be using science to help us decide what’s valuable and what’s not.”

Taconic Partners Names Chris Balestra and Colleen Wenke as Co-Presidents

Developer Taconic Partners named longtime staffers Chris Balestra and Colleen Wenke as presidents, the first time the firm has had the role since it was founded 24 years ago, Commercial Observer has learned.

“We’re thinking about not necessarily succession, but how do we provide for the future of this firm and for the future of all of them who have invested their careers in Taconic?” Charles Bendit said. “It was a natural evolution to come to this point.”

“Charlie and I have no plans of giving up our roles,” Paul Pariser added. “But this is a way of really strengthening the organization.”

Along with Balestra and Wenke being named co-presidents, Taconic also promoted senior vice president Matt Weir as executive vice president.

Wenke joined Taconic fresh out of college 20 years ago, and led the firm’s development and construction practice, overseeing both ground-up and restoration projects, according to Taconic.

Balestra joined Taconic in 2005, previously served as a bank officer for M&T Bank, and has been involved in nearly $4 billion of real estate acquisitions in New York City while at Taconic.

As part of their new roles, Wenke and Balestra will continue to oversee more of the day-to-day operations of Taconic, freeing up Bendit and Pariser to focus on strategy, deals and new opportunities.

“I think they do a better job at what they do than I do,” Bendit said. “We take great pride in their accomplishment and how they’ve grown into the position they’re stepping into.”

The promotions at Taconic came the same week that the developer was able to land a $600 million capitalization with its partner, Nuveen Real Estate, for a life sciences development at 125 West End Avenue.

Bendit and Pariser said the firm is also focused on finishing up the second phase of the Lower East Side’s Essex Crossing development this year, along with potentially starting a new multifamily project in Inwood, looking to expand its development advisory business, and actively invest in new projects.

Taconic Partners, Nuveen Land $600M Capitalization for 125 West End Avenue

New York City’s next Life Sciences hub is off to the races with construction financing plus a new Equity Partner

Taconic Partners and Nuveen Real Estate have sealed a $600 million capitalization for 125 West End Avenue, the partnership’s state-of-the-art, life sciences development on Manhattan’s West Side, Commercial Observer has learned. 

The deal closed today.

As part of the capitalization, LaSalle Investment Management — on behalf of its underlying limited partner —has joined as an equity partner, and funds managed by Apollo Global Management and Oaktree Management have provided $393 million in construction financing for the project. 

The eight-story, 400,000-square-foot property was originally constructed as an automotive facility by Chrysler Corporation, before becoming part of the Walt Disney/ABC campus and New York headquarters in 1985. Taconic and Nuveen acquired the asset in 2019, and are now redeveloping the former office space into a dynamic life sciences building that will include wet and dry labs, engineering zones, conference centers and event space. 

“The transformation of 125 West End Avenue into a state-of-the-art, life science hub and our recapitalization of this project is a testament to the resilience of New York City and the promise of this emergent sector,” Taconic President and Chief Investment Officer Chris Balestra, said. “We are pleased to be working with our partners to realize this project — the largest of its kind to move forward since COVID-19 impacted our great city.”

“Life sciences is a sector that continues to evolve and show promise,” Nadir Settles, managing director of Nuveen Real Estate, said. “As Taconic and Nuveen set out to address the lack of supply of lab space in the market, we do so with confidence in our team and in the strength and resiliency of New York City.” 

The life sciences market has appeared to pandemic-proof real estate with investment in the sector continuing to grow. In New York City, leasing for the life sciences sector more than doubled between 2019 to 2020, reaching its highest level in nearly a decade, a report from CBRE found.

However, the life sciences sector has been hampered in the city due to a lack of supply, something Settles previously told Commercial Observer. Nuveen was looking to change with the 125 West End development and future projects.

“We’re looking for more and I think we will do more,” Settles previously told CO. “I think it’s a space that certainly has a tailwind and it certainly has a lack of supply in the market. It has the talent here, and so, if we can do more of it, we certainly want to do more and we’re evaluating opportunities now.”

The transaction marks another step forward in Taconic’s $2 billion planned investment into the New York City life sciences market. The property at 125 West End Avenue sits only 10 blocks north of Taconic’s Hudson Research Center at 619 West 54th Street, further solidifying the West Side of Manhattan as a life sciences cluster, as well as the firm’s control of a critical mass of life sciences properties in the area. 

Once part of the nine-building, 1.7 million-square-foot ABC Campus acquired by SIlverstein Properties in 2018, 125 West End Avenue was carved out, along with 320 West 66th Street and Lot 61 — the three assets collectively known as the West End Campus — and sold to Taconic and Nuveen a year later

Following a two-year, sale-leaseback agreement, ABC vacated its space at 125 West End Avenue property this January, and construction commenced in February. The redevelopment will involve a comprehensive renovation of the building, including a new mechanical plant with purpose-built lab infrastructure, a new high-performance facade, a roof terrace, conference center and new lobby. 

Architect Perkins+Will New York and engineering firm Jaros, Baum & Bolles (JB&B) are leading its design. JRM Construction Management is the project’s construction manager. Construction is expected to wrap in 2023. 

LaSalle’s equity investment was negotiated by CBRE’s William Shanahan, Darcy Stacom and Steven Purpura. JLL Capital Markets’ Evan Pariser and Geoff Goldstein arranged the construction loan. 

“125 West End Avenue fits well with our winning properties strategy, which includes buying and developing well-conceived, life science projects for our clients. Manhattan’s numerous research institutions and growing life sciences sector will be looking for robust infrastructure, attractive design and highly amenitized facilities to compete for top talent,” Stu Sziklas, LaSalle’s U.S. head of custom accounts, said. “Taconic and Nuveen Real Estate have a long track record of success in New York, and are excellent partners on this state-of-the-art, transformational project.”

“Oaktree is thrilled to be working with a best-in-class consortium of sponsors and capital partners on this landmark project at 125 West End Avenue,” said Justin Guichard, co-portfolio manager for Oaktree’s Real Estate debt and structured credit strategies. “We believe the upcoming growth of the life science sector will continue to diversify and strengthen the already robust NYC economy.”

In an interview last month, Taconic executive vice president Matthew Weir spoke of the firm’s investment in New York City life sciences underscoring its commitment to, and belief in, the city. He also spoke of the city’s resilience and evolution.

“New York used to be such a finance hub, then we saw TAMI, and now life sciences are coming in,” he said. “So, it’s a really fascinating evolution of the city. And that’s ultimately Taconic’s fundamental thesis: Why have all these sectors been drawn here, to grow and flourish here? We would say it’s ultimately due to the fundamental premise that talent wants to be here.” 

Trader Joe’s Reveals New Store At 121 West 125th Street In Harlem, Manhattan

Trader Joe’s will soon open a new grocery store in Harlem, the chain’s first location in Upper Manhattan. The store will occupy 28,000 square feet of ground-floor space of the forthcoming Urban League Empowerment Center at 121 West 125th Street.

Developers responsible for the new property include The Prusik GroupBRP CompaniesL+M Development Partners, and Taconic Partners. When complete, the Urban League Empowerment Center will also house the new headquarters and conference center for the National Urban League, as well as the Urban Civil Rights Experience Museum, New York State’s first civil rights museum, and a new Target.

Additional components will include 170 units of supportive and affordable housing for low-income New Yorkers making 30 to 80 percent of Area Median Income.

“This continues to be a dream project for our development team,” said S. Andrew Katz, principal of The Prusik Group. “We are beyond thrilled to bring the National Urban League back to Harlem, open the first civil rights museum in the state, and now, one of most beloved grocery stores in the country alongside it. We’re looking forward to welcoming the community to what will be a cultural and commercial hub for Harlem in 2023.”

Designed by Beyer Blinder Belle, the entire structure will comprise 414,000 square feet and top out at 17 stories. As revealed by YIMBY in August, renderings of the project depict a six-story podium with floor-to-ceiling windows and a punched-in balcony outlined in darker glass along West 125th Street. Above the podium levels, the residential tower is set back from the West 125th Street elevation and overlooks what will likely be private recreational area for building tenants.

One Essex Crossing Launches Sales On The Lower East Side Of Manhattan

Today, One Essex Crossing is officially launching sales, and YIMBY has an exclusive reveal of a slew of renderings for the project, for which occupancy is anticipated later this year. Located on Manhattan’s Lower East Side, the 14-story full-block development is designed by CetraRuddy and developed by Delancey Street Associates, which is comprised of BFC Partners, L+M Development Partners, Taconic Partners, the Prusik Group, and Goldman Sachs Urban Investment Group. The site is bounded by Delancey Street to the north, Suffolk Street to the east, Broome Street to the south, and Norfolk Street to the west, and is one of several addresses in the Essex Crossing master plan that’s spread across six acres and a total of nine buildings. Corcoran Sunshine Marketing Group is handling sales for One Essex Crossing with prices ranging from $890,000 for a studio, to $6,689,000 for a duplex penthouse.

Inside One Essex Crossing, residents enter the building through a glass-enclosed bridge that features direct sight-lines to the historic Essex Market and new Market Line retail below. Residents can enjoy the 9,000-square-foot landscaped garden with an outside fitness area on the sixth floor, atop the south-facing podium setback. There are two additional glass-enclosed “amenity peninsulas” that overlook the gardens, a separate yoga room, a residents’ lounge dubbed “The Sun Room,” and a children’s playroom. Also within are 175,000 square feet of Class A office space, with ceilings as high as 13 feet.

Thirty percent of all residences come with their own private outdoor space, and range in size from 518 square-foot studios to 2,187 square-foot three bedrooms, along with a variety of penthouses. Homes are designed with wide-plank European White Oak flooring throughout, custom kitchens with storage and display shelving, tabac oak and taupe glossy lacquer cabinetry with polished nickel fittings, honed Dolomiti marble countertops and backsplashes, and Miele appliances. Calacatta Lincoln marble lines the master bathrooms’ walls and countertops, accented by polished nickel fixtures and fittings, and secondary baths feature Bianco Carrera marble tile floors and walls.

“We were inspired by the artistic attitude of the Lower East Side, from its architecture to its restaurants. We worked to create a backdrop to what was happening on the streets below and to pay homage to the ornate metalwork and materiality that help define many of the classic buildings in the neighborhood. Through the three-dimensional layering of brick, terracotta, and glass, we were able to weave texture into a facade that harmonizes beautifully with the rest of the neighborhood,” explained Nancy Ruddy, Founding Principal of CetraRuddy.

“One Essex Crossing’s connection to The Market Line, visible through the glass, soundproof bridge in the residential entry, is one of the most exciting aspects of the building. The dynamic and functional experience that the building affords residents has truly elevated the concept of vertical living in New York City,” added Colleen Wenke, Chief Development Officer for Taconic Partners, who is leading the development of One Essex Crossing.

The closest subways are the J, F, M, and Z trains at the Delancey Street/Essex Street subway station, while pedestrian and bicycle paths for the Williamsburg Bridge are found along Delancey Street.

The entire Essex Crossing complex is largely complete, and is expected to cost $1.9 billion and bring more than 1,000 new homes to the Lower East Side, as well as new urban green space, over 350,000 square feet of Class A office space, and 300,000 square feet of retail.

Former Chrysler Showroom on the West Side to Become Science Labs

While many developers are turning the large, former automotive showrooms on the Far West Side into office space, Taconic Investment Partners and Nuveen Real Estate have decided to transform one such building into lab space for life sciences firms, which have thrived in the midst of an economy shattered by the pandemic.

The property was, until recently, part of the Disney-owned ABC campus on the Upper West Side. Taconic and Nuveen purchased the seven-story building at 125 West End Avenue and two other adjacent sites for $230 million last year. ABC will continue to use the Art Deco industrial building as television studios until it moves downtown in January 2021.

When construction starts early next year, the building will be completely reclad in a glass and aluminum curtain wall system that allows it to become much more energy efficient. The facade work will involve removing the existing brick windowsills and enlarging the windows, so they are floor-to-ceiling.

Removing the interior windowsills and radiators also give the developers more rentable office and lab space on each floor. The exterior columns will be clad in a painted aluminum that is creased, in order to give the appearance of movement as the sun reflects off of them at different times of day, according to architect Matthew Malone of Perkins&Will, who is overseeing the project.

“We couldn’t wholesale change the building’s structure,” Malone said. “The overclad [facade] does this thing of repositioning the building as a completely new building on the marketplace, and it allows us to improve the building’s energy performance.”

The 1930s property was originally constructed as a showroom and body shop for Chrysler. Like many of its Albert Kahn-designed neighbors to the south, the building includes a massive, interior helix-shaped ramp, which begins at street level and continues up through each floor to the roof. While the street-level remnant of the ramp will be removed, the rest of it will remain. The architects plan to convert it to a series of small conference areas, libraries and cafe spaces, depending on what tenants want.

The architects have also teamed up with engineers at JB&B to develop energy-efficient heating and cooling systems for the building. That includes water-chilled air conditioning with chiller towers on the roof, and an energy-recovery system that captures the heat from the cooling towers and condensers and uses it to heat the building. The new HVAC system will also bring in new outside air several times an hour, something sure to appeal to lab and office tenants post-COVID.

The new mechanical core will also include destination dispatch elevators, which the architects hope to link to a touchless entry system.

An amenity floor in the basement will have a conference center, bike storage, lockers and showers.

Taconic plans to convert the building into 50 percent office space and 50 percent lab space. And with 54,000-square-foot floor plates, tenants will have the option to intermingle or separate labs and offices as they see fit.

“Our vision for the building is that it’s a significant enough asset that we could replicate the various stages of the life science ecosystem within it, for anchor tenants that need 100,000 square feet, and for smaller tenants that need step-up space between 12,000 and 25,000 square feet,” Nate Bliss, a Vice President at Taconic, said.

Readying New NYC Office Complexes For COVID-Era Concerns

With COVID’s lethal second surge prompting more questions than ever about the future of the workplace, it’s instructive to note the pace of new office building construction has never faltered throughout the health and economic crisis. Nowhere is that more evident than in New York City, where from Midtown to Hudson Yards, Hudson Square and the Lower East Side, construction workers have continued to build office buildings, COVID or no.

Common to the new offices under construction are pandemic-era touches, including entirely customized and flexible HVAC systems, destination dispatch elevation, no-touch technology and other health and safety features intended to provide a sense of security. As well, many of these complexes’ settings appeal to folks who can walk or bike in from the same or nearby enclaves. All extras are intended to make tenants and office staff more comfortable with returns to the office.

“There is no question the office market is challenging right now,” says Matthew Weir, senior vice president, commercial asset management with Taconic Partners, among the developers of the two-building Lower East Side development Essex Crossing.

“The pandemic has shifted tenants’ perspectives, priorities and standards. It is going to be important for landlords to adapt to, and embrace, change and innovation. Office tenants’ pre-COVID preference for large, social experiences have shifted toward more exclusive environments as employers focus on health and safety. In addition, live-work-play neighborhoods, which have always appealed to tenants, have taken on a different context amid the pandemic, with some looking to avoid mass transit.”

Different submarkets

Among the new office buildings is Two Manhattan West, Brookfield’s new 2-million-square-foot office development, with Cravath the anchor tenant. It’s part of the 7-milllion-square-foot, master-planned development in the new Hudson Yards district.

Another example is 660 Fifth Avenue, also from Brookfield. A 1.4-million-square-foot office redevelopment in the Plaza District, it is the most significant redevelopment on Fifth Avenue to be undertaken this century. In a nod to pandemic-era sensibilities, tenants can choose between DX units and DOAS systems.

Yet another is 550 Washington Street, an Oxford Properties 1.3-million-square-foot office building featuring re-developed floors at the base, topped by new construction. Situated in the Hudson Square submarket featuring dramatic Hudson River views, the building was leased in its entirety last year by Google as part of its mushrooming West Side campus.

Entirely self-contained

Among the most high-profile office developments and, given COVID’s challenges, most nimble, is Essex Crossing. Located in the heart of the Lower East Side, one of New York City’s most fabled and distinctive enclaves, Essex Crossing is an entirely self-contained 1.9-million-square-foot campus providing the kind of unique and adaptable space many experts believe will be highly sought during and after COVID-19. The offices feature sprawling floorplates, outdoor terraces, open green space and direct walking and/or biking access to and from some of New York City’s most popular Millennial neighborhoods.

The expansive floor plates extend from 35,000 to 52,000 square feet in size, allowing flexibility and customization. A low-rise five-story building features private lobbies and elevator banks to permit maximum control of the environment.

State-of-the-art, tenant-controlled HVAC systems can accommodate use of ultraviolet light to thwart coil-borne and/or airborne mold, bacteria and germs. Upgraded cleaning specs ensure offices are maintained to the highest cleanliness standards.

In-office bike storage with showers and lockers and direct access to 13 on-campus Citibike stations will let office workers bike in five minutes from East Village, Nolita, Solo, Noho and Chinatown, eight minutes from Greenwich Village, Hudson Square and Tribeca and 11 minutes from such Brooklyn nooks as Dumbo and Williamsburg.

“The New York City office market is certainly evolving,” Weir says. “The Essex Crossing Offices are a prime opportunity for companies to create their new office norm, to continue to attract and retain the right talent.”

In a Battered New York Office Market, Life Science Is Flourishing

With state and city government support, developers are building laboratories for medical research and incubator spaces for biotech start-ups amid the race for a coronavirus vaccine.

The coronavirus pandemic, which has focused greater attention on health care and spurred a heated race for a Covid-19 vaccine, has also ratcheted up interest in life science real estate in New York.

The city had already been trying to play catch-up with other life science powerhouses such as Boston, San Diego and San Francisco. Real estate companies, with government support, had been building commercial laboratories for medical researchers, incubator spaces for biotech start-ups and offices for pharmaceutical companies poised to bring new drugs to market.

Now, funding from investors is flowing to such projects at a time when the city’s office market is battered by lockdowns and orders to work from home. Office availability in Manhattan jumped to 14.1 percent in the third quarter from 11.8 percent in the same period a year ago, while the average rent dropped about 1 percent, according to Newmark, a commercial real estate advisory firm.

Developers are jumping on the life science bandwagon, which has emerged as a bright spot in an uncertain picture for commercial real estate. Rent for labs in Manhattan averages around $105 a square foot, according to a report from CBRE, a real estate services company.

Experts are warning that it may be too soon to celebrate a turnaround, but developers are charging ahead.

A rendering of a former Chrysler showroom occupied by the Walt Disney Company for decades that Taconic Partners plans to convert into a life science hub.
A rendering of a former Chrysler showroom occupied by the Walt Disney Company for decades that Taconic Partners plans to convert into a life science hub.Credit…Viewpoint Studios
The Taconic project will be part of an emerging life science cluster on Manhattan’s West Side.
The Taconic project will be part of an emerging life science cluster on Manhattan’s West Side.Credit…Viewpoint Studios

The latest move comes from Taconic Investment Partners, which has just revealed plans to convert a former auto showroom on the West Side of Manhattan into a life science hub. The building was erected in 1929 for Chrysler, but ABC has occupied it for decades. When the Walt Disney Company, which owns the television network, departs in January for new digs downtown, Taconic, in a partnership with Nuveen Real Estate, will begin overhauling the building, said Matthew Weir, a senior vice president at Taconic.

“We think this is a game-changing point in New York,” he added.

The city has long possessed key ingredients for the life sciences to flourish. It has leading universities and academic medical centers — the places where scientific breakthroughs are often made and bioscience businesses born. And it is teeming with chemists, biomedical engineers and other life science professionals.

Funding to research institutions in the city from the National Institutes of Health, the federal government’s biomedical research agency, has risen every year since 2016 and last year hit $2.2 billion, second only to the Boston area.

But New York has lacked labs and other spaces entrepreneurs need to start their companies and bring drugs to clinical trials and, eventually, commercial production.

As a result, young biotech firms tended to go elsewhere. For instance, Regeneron Pharmaceuticals, spun out of research done at Columbia University, moved 30 miles north to Tarrytown, N.Y. The company, which had revenue of more than $7.8 billion in 2019, is conducting trials for a Covid-19 antibody treatment that was recently given to President Trump.

The situation began to change in 2010 when Alexandria, a California-based developer of bioscience complexes, opened a gleaming tower known as the Alexandria Center for Life Science-New York City on the East Side of Manhattan on the hospital corridor known as Bedpan Alley. The location reflects the conviction that life science developments need to be near research institutions, forming “clusters.” In 2014, Alexandria completed the second of three planned towers on its campus.

Governmental initiatives were established to encourage such efforts, which promise high-paying jobs and tax revenue. In 2016, New York introduced a $500 million life science initiative, led by the city’s Economic Development Corporation. In 2017, New York State unveiled its own $620 million plan.

Deerfield Management Company, a health care investment firm, is a beneficiary of the city program. It is receiving nearly $100 million in tax credits for converting a 12-story building in the Flatiron district into a vertical campus with lab space, lecture halls and offices for nonprofit groups and academic institutions.

Janus Property Company is overseeing construction of the Taystee Lab Building on the site of a former bread bakery.
Janus Property Company is overseeing construction of the Taystee Lab Building on the site of a former bread bakery.Credit…Jeenah Moon for The New York Times

Retrofitting a building for life sciences can be a major undertaking. While less expensive and faster than building from scratch, the cost can be four times higher than the cost to convert a building for office use, according to some estimates.

Nor is every building suitable for conversion, said Peter Schubert, a partner at Ennead Architects, which has worked on life science projects. The best candidates have large floor plates, are structurally robust to prevent vibrations that can be disastrous in lab work and have high ceilings that can accommodate the extensive ductwork necessary for enhanced ventilation. Electrical systems need to support increased power requirements. Loading docks may need to separate, say, the secure arrival of tissue samples and the removal of chemical waste. Although former manufacturing plants often fit the bill, “it’s really building by building,” Mr. Schubert said.

The challenges haven’t discouraged developers.

Taconic’s upcoming project will be part of an emerging life science cluster on Manhattan’s West Side. The developer, working with Silverstein Properties, has already rebranded a nearby former film production studio as the Hudson Research Center, leasing space to tenants including the New York Stem Cell Foundation.

Plans for the new project were drawn up by Perkins & Will, an architecture firm, and call for replacing the brick and concrete facade with glass and shiny aluminum. A helix-shaped auto ramp, a remnant from the building’s showroom days, will become the centerpiece of the reincarnated interior. The renovation is expected be completed in early 2023, Mr. Weir said.

Other projects are underway in a growing life science cluster in West Harlem, near Columbia University, where Janus Property Company is retrofitting old brick factory buildings for tenants including Harlem Biospace, an incubator offering co-working lab space. Janus is also constructing the 350,000-square-foot Taystee Lab Building on the site of a former bread bakery.

The Taystee Lab Building is part of a cluster of life science projects near Columbia University, highlighting the importance of proximity to academic research.
The Taystee Lab Building is part of a cluster of life science projects near Columbia University, highlighting the importance of proximity to academic research.Credit…Jeenah Moon for The New York Times

Long Island City, Queens, is another locus of activity. Alexandria is converting an old book bindery for lab and office space, and GFP Real Estate and King Street Properties are collaborating on another conversion. And several bioscience companies are at the Brooklyn Army Terminal.

A flood of private venture capital money to the companies that would occupy such projects has only buoyed interest.

“Every week, a developer is buying a building to convert to life science,” said Joshua King, an executive managing director at Cushman & Wakefield, a commercial real estate company. He said that he and his colleagues were constantly fielding calls from landlords considering office-to-lab conversions.

But the life science “boom” is a boomlet, at best.

Of nearly 500 million square feet of office space in New York, less than two million square feet are redeveloped for labs or marketed exclusively for the life sciences, although more is in the pipeline. (For comparison, Boston has around 30 million square feet of such space.)

Life science “is by no means going to be an office savior in New York,” said William Hartman, an executive managing director at Cushman & Wakefield. “It’s not going to solve the big office vacancy problem.”

“Maybe we’re experiencing a premature exuberance,” he added.

The availability for buildings marketed for labs is 30.5 percent, according to the CBRE report, although the availability for prebuilt space is just 2.3 percent.

“The reality is, the demand is limited,” said John H. Cunningham, an executive vice president at Alexandria. “There are a handful of companies out there in the market kicking tires.”

But Lindsay Greene, chief strategy officer at the Economic Development Corporation, predicted that demand would catch up with supply as seed-stage companies secure funding and graduate from incubators to their own spaces. “There’s a catch-up effect,” she said. “We have to allow time for it to play out.”

Some existing life science space has served pandemic-related endeavors. The city located its Pandemic Response Lab, which processes coronavirus tests, in the Alexandria Center.

Still, the future of the sector will depend on tenants that will outlast the pandemic. It takes about 25 years for a life science sector to reach maturity.

“Our goal is not to overtake some other city,” Ms. Greene said, “but to be in a peer group with them.”

Luxury Developers Ramp Up Virtual Offerings for Stir-Crazy Renters

With amenity spaces off limits, lifestyle directors and amenity-service companies are planning virtual classes, workshops and online meet-and-greets to fill the void amid coronavirus

A Date Night dinner demo was in full swing one recent Friday at 525 West 52nd Street, a luxury rental building in Manhattan.

Peter Sheehan, resident experience manager for the 392-unit complex, where rents range from $3,500 to $9,000, greeted residents as they arrived. Then he introduced the head chef from a boutique cooking school who would be teaching them how to prepare handmade ravioli with brown butter and sage.

“We’re just trying to get people engaged and connected, and hopefully doing some good cooking,” said Mr. Sheehan, a 36-year-old former hotelier. “I’ve got my dough wrapped up and my wine is flowing.”

But unlike the many events Mr. Sheehan hosted in the building in the pre-Covid-19 past—whiskey tastings, poker nights, concerts by subway musicians—this Date Night was virtual. The chef, 35 residents and Mr. Sheehan were each in their own kitchens connecting via Zoom, the videoconferencing service.

With the novel coronavirus and strict social-distancing mandates confining New York City residents to their apartments, Mr. Sheehan’s job—keeping his residents connected through a steady diet of events, activities and treats—has gotten a lot more challenging. When they are not planning virtual events, social directors like Mr. Sheehan have become a lifeline for stir-crazy renters, offering tips on which local stores have fresh fruit and short lines, and hooking up online activities for children.

“It helps them navigate trickier times, understanding that there are people here supporting them,” Mr. Sheehan said of the renters.

That Friday morning, he had set out white bags of neatly packaged ingredients in the lobby, tagged with the apartment numbers of residents who nabbed, free of charge, the 35 spots in the limited workshop. Before the lesson began, he checked in with Ken Connors, head chef of City Cooking West End, to make sure the chef’s webcams had good angles on his butcher block and stove.

Even before the pandemic, New York City’s luxury rental buildings had been going beyond fitness centers and plush lounges to offer ambitious lifestyle programs: monthly mixers, book clubs, baby boogie classes, and jaunts to museums and galleries.

For a developer with a high-price building to lease out, it was no longer enough to have a rooftop terrace, you had to have a stargazing party on that terrace with a guest astronomer and catered s’mores.

Although many developers work with amenity-service companies, others have installed in-house lifestyle directors like Mr. Sheehan—a hip reboot of Julie the cruise director from “The Love Boat,” with a bro beard.   

“Peter has been the friendly face of the building, checking in just to say, ‘Hi’ or ‘Here’s something for the kids,’ or a [virtual] exercise class, or ‘If you’re feeling alone, here is counseling they’re offering [through a Zoom workshop],’ ” said Dean Loxton, 45, a filmmaker. He lives at 525 West 52nd Street with his husband and 18-month-old daughter, Maya, in a two-bedroom apartment they rent for $8,200 a month.

Although he has his own office in the building, Mr. Sheehan is employed by LIVunLtd, an “amenity space-management and activation” company that provides a range of services to about 200 residential buildings in New York City and New Jersey—64 of which have dedicated on-site coordinators.

Thea Wittich, left, co-founder of Axiom Amenities, with amenities associate Yamilex Chavez at 50 West, a Manhattan luxury rental building.

Since the pandemic hit, LIVunLtd has developed a roster of a la carte virtual events: live-streamed yoga and Pilates classes, workshops on perfume-blending and truffle-making, and online meet-and-greets with actors from shuttered Broadway shows such as “Wicked” and “Hamilton.”

Before the pandemic, 525 West 52nd Street’s developer, Taconic Partners, was spending $50,000 to $100,000 a year on amenities programming, according to Vice President Andrew Schwartz.

Residents of the building, which opened in 2017, get access to its club programs for a monthly fee of $85, since suspended. The building’s library, fitness center, golf simulator lounge and other amenity spaces have all closed, but Mr. Sheehan is still coming in several days a week.

In mid-March, Waterline Square, a three-tower complex on Manhattan’s Upper West Side with 916 rental apartments priced from $5,230 to $35,000, was days away from opening its Waterline Club: a 100,000-square-foot amenity space with an indoor tennis court, 30-foot rock-climbing wall, bowling alley and recording studio.

“We had a robust calendar of activities, with more than 25 events planned,” said Kelly Sullivan, lifestyle director for Waterline Square, which opened last September.

Kelly Sullivan, lifestyle director for Waterline Square, creates activities for residents of the luxury complex that target various age groups.

When the pandemic shut that down, Ms. Sullivan shifted gears. “We want to give people that sense of community they’re not getting,” she said.

She asked Waterline Club fitness instructors to begin streaming their classes live on the complex’s Instagram feed, clad in club-branded baseball caps and T-shirts. (She has since provided microphones and tripods to improve sound quality.)

Weekly online events targeted different ages. Children were invited to a Zoom puppet show; adults got a Cinco de Mayo mixology class and a virtual comedy night with local talent.

Brian Feinstein, 47, a composer who was in the midst of adapting the “The Bad News Bears” for Broadway when the pandemic hit, lives in a one-bedroom apartment at Waterline Square. He participated in the comedy night and a Zoom workshop on stress-reduction led by a psychology professor.

Ms. Sullivan boxes Champagne and flutes as gifts for new residents.

“He spoke about meditation and how those of us who are carb-loading can be more mindful with food,” said Mr. Feinstein, who got his one-bedroom, ordinarily listed for about $8,250, at a reduced rate through the city’s affordable-housing lottery. “To have these events and be able to see them on the calendar is great. It gives a sense of structure.”

Other lifestyle directors are going beyond virtual events to provide some hands-on support for their residents.

“If we know they have a birthday coming up, we’ve been decorating residents’ doors with streamers and balloons,” said Thea Wittich, co-founder with her husband, Michael Wittich, 40, of Axiom Amenities. They oversee the amenities program at 50 West, a 186-unit tower in Manhattan’s Financial District.

“We’re doing one for a resident who is graduating from the University of Pennsylvania, in her school colors,” she said of the decorated doors.

Before the pandemic, Ms. Wittich, a 33-year-old former personal trainer, hosted three to five free events a month for 50 West residents, who pay between $6,200 and $65,000 a month for rental units (the building is roughly split between rentals and condos).

The building has a full-floor fitness center and an entertainment floor with its own theater, both of which are now closed. But its team of three full-time amenity staffers have remained on site throughout the pandemic.

From Mackenzie Gleason, head bartender at The Wayland, for a mixology class at 525 West 52nd Street:

1½ tablespoons lime juice
½ tablespoon fresh ginger juice (add more for a nice kick)
2 oz. vodka
½ oz. club soda
Combine all ingredients in a shaker, except for the club soda. Give a quick shake with a few ice cubes.

Strain the cocktail into an iced glass and add club soda.

Garnish with a lime wedge and candied ginger.

For more fizz, add another half-ounce of club soda, and ½ oz. less vodka.

“There is this vision that you lay off your amenity people in a pandemic, but they have responded to this in a very strong way,” said Seth Coston, director of residential operations for Time Equities, the developer of 50 West.

Along with setting up a Zoom schedule of boot camp and yoga classes, the couple put together home-fitness kits with yoga mats, rollers and bands, and then delivered them, free of charge, to any resident who wanted one.

They also started a weekly program for children, dropping off craft kits and snack packs outside residents’ doors. “We do educational packets with STEM activities. They can build things with Popsicle sticks. We try to make it time-consuming,” Ms. Wittich said, adding that a recent papier-mâché craft didn’t get many takers: “No one was up for that mess in their house.”

She also puts out a daily newsletter with recipes and brain-teasers.

“Whoever answered the most questions correctly won a salmon meal kit and we won. My husband and I are kind of geeky, so we’re looking forward to the next one,” said Stephanie Sun, 36, an e-commerce manager for Walmart who lives with her husband and 3-year-old daughter in a two-bedroom apartment they bought in 2017, for a price she didn’t disclose. Comparable rental apartments at 50 West cost about $13,000 a month.

Thea and Michael Wittich themselves live in a building with no amenities three blocks from a city hospital.

“We are very fortunate. A lot of people are very sick,” Ms. Wittich said. “It has been wonderful for us to take [our] creativity and fine-tune it so people don’t feel alone.”

What does it take to be the lifestyle director for a high-price luxury building in New York City?

“You need a unicorn for this job,” said Michael Fazio, co-founder and chief creative officer of LIVunLtd. “You’re a host, you’re a curator, you’re a customer service manager, you’re a counselor.”

Mr. Fazio, once a concierge at Manhattan’s Intercontinental Barclay Hotel, said that though a hospitality background is a plus, he rarely recruits people from the hotel industry. Instead, his team scouts out potential lifestyle directors from the Actors’ Equity Association, design schools such as Parsons and Fashion Institute of Technology, and even while shopping or dining out. “When I go to a nice store or a restaurant and there’s someone who just has the DNA, I tell them about what we do,” Mr. Fazio said.

A two-week basic training follows, in which the raw recruit learns everything from how to deal with a broken treadmill and a no-show caterer to how to greet residents at the monthly mixer. “We don’t ask, ‘Are you unmarried?’ ” said Mr. Fazio.. He shared a few of his golden rules for lifestyle directors:

• Be friendly, but not a best friend. “We have to be very careful,” he said. “People have invited my staff to dinner parties and to their weekend homes in the Hamptons. We can’t do that.” When fielding a tricky invitation, he advises lifestyle directors to say, “I would love to, but it’s company policy that I can only be here working.”

• Beware the man bun. “Even though it’s very fashionable for men to have facial hair, there are certain resident populations where it might not depict the mood,” Mr. Fazio said. “But if it’s a trendy Brooklyn building with a lot of creatives, there’s no problem if you have an armful of tattoos and a big beard and a ponytail.”

• Be a team player. “Never commiserate with residents about problems in the building. It could be the absolute worst, nearly negligent property manager, but you never say, ‘Yeah, I know, he’s such a moron.’ Instead, it’s ‘I’m so sorry you feel that way, let me report that.’ ”

• No drinking on the job. “We’re not the guests, we’re the party-starter. Even if we’re raising a glass with the residents, we need to stay focused and remember all the golden rules, which could slip our mind.”