Lab building costs benefit from tough economic times
Posted December 2009
Against a backdrop of one of the worst recessions in U.S. history, firms have dramatically slashed profit margins in order to remain competitive and secure the limited opportunities within the current market.
To aid the struggling economy, the U.S. Government within the American Recovery & Reinvestment Act ("Stimulus Act") has incorporated significant funding focused on Research and Development (R&D) activities in addition to the ongoing year-on-year R&D funding, which for fiscal year 2010 shows a slight increase to $148 billion.
Academic sector spending has been associated with capturing monies allocated to new technologies, including research in sustainability for the environment and alternative fuels, along with an increase for stem cell research.
More research clusters around the country
There has been a dramatic expansion in the number of research hubs and clusters around the country. It's not just San Francisco, Cambridge, San Diego and Seattle any more. The number now exceeds 40. This adds another element of competitive pressure to a market where key vendors and manufacturers have been consolidating (e.g. lab furniture, sterilizers, glassware washers, DDC building automation systems).
Increased spending on stem cell research
The stem cell initiatives in California, New Jersey and other states and now in Congress suggest that significantly more spending will flow into this area. Universities and biotechs will be the first to capitalize on this.
The most influential cost driver in 2009 was the increased competitiveness due to market pressures in local markets. Generally, costs can be expected to continually drop 10 to 18% on the Coasts, 3% most everywhere else.
Costs by facility type
Fig. 1 (below) summarizes average new construction costs for various common lab facility types. Costs in this chart are pegged to the new construction market in the Tri-State New York metropolitan area, within 50 miles of midtown Manhattan but excluding the five boroughs of New York City. (Costs for the outer boroughs of Brooklyn, Queens, Bronx, and State Island are slightly less than those for Manhattan, but all are above the Tri-State index point of 100.)
2009 New research and development facility construction costs
| Building type | 2008 $/gsf | 2009 $/gsf |
| Biomedical facility | 480 - 510 | 425 - 450 |
| Animal research facility | 600 - 650 | 530 - 575 |
| Toxicology facility | 540 - 600 | 475 - 530 |
| Chemistry research facility | 540 - 590 | 475 - 520 |
| Biology research facility | 480 - 520 | 425 - 460 |
| Analytical chemistry facility | 400 - 450 | 352 - 400 |
| Software development lab | 360 - 400 | 315 - 350 |
| Hardware development lab | 425 - 475 | 375 - 420 |
| GMP production facility | ||
| - Class 10,000 | 600 - 700 | 530 - 620 |
| - Class 1,000 | 800 - 900 | 700 - 800 |
| - Class 100 | 1,100 - 1,200 | 880 - 1,000 |
| Biosafety Level 3 (BSL-3) | 525 - 575 | 460 - 500 |
| Biosafety Level 4 (BSL-4) | 560 - 610 | 500 - 535 |
| Greenhouse | 375 - 450 | 330 - 400 |
| K-12 biology/chemistry teaching lab | 450 - 500 | 400 - 440 |
| Advanced physical science research facility | 725 - 825 | 640 - 730 |
| Nanotechnology research facility | 650 - 750 | 570 - 660 |
| Source: HLW International LLP, Faithful+Gould |
Fig. 1. Costs have fallen significantly since 2008 due to the economic downturn.
Distribution of costs by trade
Fig. 2. In the typical biochemistry lab building, the cost for architecture is about equal to the cost for HVAC, plumbing, and electrical infrastructure combined. However, in an animal research lab, infrastructure costs outstrip architecture costs by about 10% (data not shown).
To control costs, laboratories were designed to be open and flexible, allowing easy reconfiguration should space needs change.
Understanding the numbers
Costs listed in Fig. 1 include all hard construction, on a gross ft2 basis, for the total built area. Imagine raising the building and turning it upside down; anything that doesn't fall out was considered part of the 'hard construction' cost. Fig. 1 (above) shows a general breakdown of such costs in the typical 100,000- to 200,000-ft2 biochemistry lab building.
For a typical new building, hard costs represent 70 to 80% of overall project costs, excluding land and financing.
Location factors
Local market conditions are volatile. But the underlying market pressures - decreased prices for commodities, oil, steel and cement due to a decrease in global demand - will result in price reduction and lower labor costs, irrespective of the local markets. Costs have decreased nationally, and are projected to remain steady through the year.
Author credits
This article is an excerpt from Ted Hammer's "Lab Building costs plummet with economy" article. Ted Hammer, FAIA, LEED AP, is managing partner at HLW International, LLP, New York, NY. Also contributing to this report was HLW Associate Carlie Campesi. Additional information was provided by Iain McWhinney, VP/BioPharma, and Oliver Hamm, LEED AP, project manager, both with Faithful+Gould.