A programmer from New York is launching the Life-Science project

Elevate also plans to spend more than $ 250 million to renovate the business property it owns with Nuveen Real Estate near several academic medical facilities, including Mount Sinai Hospital, according to Matthew Vir, Taconica’s executive vice president. The building will include 200,000 square meters of office space, and construction should begin next year.

“We saw that New York has all the basic elements to really see the growth of this sector, but of course what was really missing was the laboratory space,” he said.

In addition, the new venture seeks opportunities outside of New York, especially in other East Coast markets, said Mr. Weir, who will be president of Elevate.

Life science research has flourished in many cities since the start of the Covid-19 pandemic, boosting demand for buildings designed for pharmaceutical, biotech and other laboratory uses. Just over 29 million square feet of laboratory space was under construction in the U.S. during the first quarter of 2022, a record 55 percent more than the previous year, according to real estate company CBRE Group Inc.

But after more than a year of rampant growth, biotech stocks have entered the bear market this year as borrowing costs and scientific failures have dampened investor enthusiasm. SPDR S&P Biotech ETF,

the equally weighted index of biotech stocks has fallen 43.44% to date compared to a 21.33% drop in the S&P 500.

Life science companies, especially startups, receive much of their funding from venture capital firms. These companies, in turn, end up looking for high stock market values ​​to get out and profit from their startup investments.

“There’s a lot of uncertainty there,” said Austin Barrett, executive vice president and head of the life sciences group at Savills brokerage. He said the funding channel for venture capital companies and government agencies remains strong.

But he added: “If companies can’t go out and raise large public funds, then they can’t hire so quickly.

New York’s market, a total of 4.9 million square feet of existing space for life science, is still in its early days, according to real estate company Colliers.

The country’s leading markets, Boston and the San Francisco Bay Area, each have more than 30 million square feet of real estate in the field of life sciences, Colliers said.

Historically, suburbs have been more suitable for laboratory real estate, with plenty of space and more affordable rental rates for large R&D campuses, said Aaron Jodka, director of research for U.S. capital markets at Colliers. But technological and architectural advances have made it possible to build laboratories on the upper floors of office buildings, opening up more opportunities for development in New York.

The city has other ingredients for a growing life science industry, including $ 5.6 billion in venture capital and $ 3 billion in federal research grants that arrived in the sector last year. “You are starting to see a really strong recipe for the future development of life science,” said Mr. Jodka.

Founded in 1997, Taconic owns commercial and residential properties. The company is best known for remodeling a huge building on Eighth Avenue that it sold in 2010 to the current Alphabet Inc.

Google Division.

Mr Weir said he was not worried that the turmoil in biotech stocks would jeopardize the demand for laboratory space, in part because he believes the demand for new therapeutic and other technologies, such as climate and agricultural technologies, will outlive current stock market losses.

“Public market disruptions are currently resetting the foundations,” Mr Weir said. “Population aging, the emergence of personalized medicine, technology such as mRNA - there is so much momentum in the market that these topics will continue at the macro level.”

To write Kate King at [email protected]