The Realities of Real Estate Subleasing for Lab Users
There’s a goofy quote in the movie “Almost Famous” that pretty much reflects what many, if not most, development stage life science companies experience when looking for lab space. Jimmy Fallon is courting the band (Stillwater) to be its new manager while explaining the lay of the land and where they’ve been led astray by their old manager. Pouncing upon their momentary self-doubt, he ends by delivering this cheesy nugget to close the sale - “I didn’t invent the rainy day, man. I just own the best umbrella.”
When it comes to looking for lab space for earlier stage companies, it often seems like a perpetual rainy day. Unless buoyed by enormous rounds of financing, companies with more conservative budgets can quickly feel the water rising as they seek space that won’t sink them during the critical early stages of development. When the market doesn’t bear an intuitive solution for a company’s facility needs, a sense of panic can set in and lead that company to grasp at straws. Soliciting guidance from a trusted source to separate fact from fiction is crucial to regaining focus and achieving the company’s ultimate goal – getting to work.
(I refuse to tie the umbrella analogy into this but I think everyone gets the gist, right?)
When we engage a new client with a space search requirement, we first collaborate with them to develop a space program to be used when evaluating the market for opportunities. For lab tenants, the list of necessary space components, infrastructure, and equipment can pile up pretty quickly. Coupled with pressures to occupy (and get to work) quickly, minimize capital expense, structure leases with some degree of flexibility, and not completely succumb to outrageous rents, the list of available space candidates can constrict pretty quickly. When pickings are slim, people will (rightfully) question the validity of that claim.
Finding the Perfect Sublease for Lab Space
Because subleases can meet so many of the criteria points illustrated above, they almost always enter the conversation. Finding a sublease that almost perfectly complements a company’s space and business objectives can be like finding a winning lottery ticket. Executives who successfully find and take advantage of a situation with lower rent, existing infrastructure, and shorter lease term will flaunt it like bling and tell everyone and anyone how they led their companies to facilities greatness in the face of an unforgiving market.
As much as we want clients to rub their perfect space in the face of their peers, like Jimmy Fallon, we are often left instead to explain the lay of the land and why, even in a down market, subleases are not as prevalent as one may assume and those that do exist may have challenges that are too costly to overcome. Sure, we’re party poopers, but we want people to understand exactly what they’re getting into before they invest time and money into something that is not what it seems. That is why we’ve created a guide for subleasing lab space, which can really be used both by companies looking for space and those who may consider subleasing. We hope this resource can be helpful.
Get the Guide to Subleasing for Lab Users