D Magazine: DFW Needs to Fill the “Missing Middle” in Life Sciences Ecosystem

By Isabel Mandujano

The following is excerpted from D Magazine.

As biotech expands in North Texas, mid-sized lab facilities are increasingly crucial to retain companies and support their evolution.

The rapid growth of Dallas-Fort Worth’s life sciences sector, which includes several major campus developments, is overlooking a critical gap in the market. For mid-sized companies — those too large for incubators but not yet ready for their own campus — there remains a significant shortage of lab space.

If this “missing middle” isn’t addressed, DFW risks losing these young companies, a vital link in the local life sciences ecosystem, to established hubs in other cities. A healthy market needs facilities to meet the full life cycle of life science companies, which have different, predictable requirements at every stage. Early on, companies may simply rent bench space at an incubator. When they are larger and established, they’re looking at large-scale facilities to manufacture and distribute products to market.

Mid-stage companies have very specific needs. They might have 20 or more employees, and for the first time they are concerned about protecting intellectual property, establishing a brand identity and showcasing their work to potential clients and investors, developing a collaborative culture, attending to scientist well-being and streamlining operations. But their future is full of unknowns. They need flexible leases and adaptable facilities to accommodate the infrastructure for expanding teams and evolving research methods, including high power density, specialized ventilation, hazardous waste storage and structural support for vibration sensitive equipment. Companies with a focus on clinical trials often require unique facilities with CLIA-certified labs that are able to serve study participants and provide for proper handling of biomedical samples.

DFW research institutions and developers have been addressing early-stage companies with incubator facilities and build-to-suit campuses are in development for larger, established players, but they have been slow to create facilities to meet the specific needs of these mid-stage emerging firms. While a handful of big life science campuses with a variety of facilities are planned throughout the region — including the Texas Research Quarter; the Mansfield Innovation Community, a proposed development in DeSoto; and the continued expansion of Pegasus Park — the bulk of the space is five or more years away.

For now, demand for flexible, mid-sized lab spaces far exceeds supply. For developers and building owners, there is an opportunity to address the market gap, as long they listen to companies and create facilities that match the unique requirements of these fledgling enterprises.

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One answer is “graduate” labs like the newly opened Bridge Labs at Pegasus Park. With a mix of speculative lab space and customizable “warm shell” spaces, it is the prototypical “missing middle” facility, serving companies in that 20- to 30-person range. On a site adjacent to Biolabs at Pegasus Park, a facility catering to start-ups, the owners replaced an existing building and gutted a second to create Bridge Labs, a 135,000-square-foot purpose-built research and development space boasting “the first institutional quality, non-incubator space” in the region.

Bridge Labs offers the type of life science infrastructure essential to a growing life sciences company, including upgraded power, HVAC (1.5 CFM/SF), gas service, loading bays and a service elevator. Pre-built lab amenities, including shared glass wash, autoclave, lab waste and chemical storage areas make it “move-in ready” for next generation enterprises that have outgrown the incubator stage.

Beyond new, flexible facilities like Bridge Labs, converting office buildings to labs is the next likely option for addressing the needs of growing companies that are looking for space right now in other areas of the Metroplex. But the process can be complex challenging and potentially expensive if the builder owners don’t get it right and don’t listen to the needs of potential clients. Several biotech founders have recently told me about their bad experiences after developers rushed to repurpose ailing commercial properties without fully understanding the technical requirements. Companies moved in only to learn that they couldn’t install a chemical fume hood, or fit equipment in the elevator, or store more than 24 hours’ worth of waste material.

Doing a lab conversion right takes due diligence. That means assembling a team of experts in lab planning, architecture, engineering and construction, and engaging them early in the process to analyze the feasibility of an effective conversion, based on existing conditions, the scientific and business goals, and a realistic budget.

For DFW to become a competitive life sciences hub, it needs to be analytical in its approach to developing spaces that fit the market needs. Addressing the “missing middle” will help the region create a network of facilities that supports companies at all stages, fostering local innovation, strengthening the economy, and building a sustainable, competitive ecosystem for life sciences in North Texas.

First published in D Magazine.