Healthcare Clusters Are Coming To Chicago, And Could Fill Big Holes In The Landscape

Experts believe Chicago lags behind cities like Boston and San Francisco when it comes to nurturing communities dedicated to scientific investigation, and is squandering its potential to be a research hub.  

That may be about to change.

Local developers are putting together plans to create districts focused on biomedical research and life sciences, and say these will attract a host of companies, startups and labs, greatly expanding the city’s portfolio of healthcare real estate.

“We already have tremendous assets in Chicago, including researchers, laboratory space, venture capital and respected academic centers, but the problem right now is they are all very siloed,” said Bob Chib, co-founder of Kaleidoscope Health Sciences, which is working with Farpoint Development on its plans for a life sciences cluster on the former site of Michael Reese Hospital near Bronzeville and the lakefront.   

Unlike researchers or startups located in clusters such as Kendall Square in Cambridge, Massachusetts, or San Francisco’s Mission Bay, Chicagoans typically don’t have spaces where they can quickly expand, or enjoy easy access to firms with the ability to turn ideas into commercial products.

“Right now, it’s not unusual for local startups to end up going to Boston or San Francisco,” Northwestern University Associate Vice President for Research Phil Hockberger said.  

Hockberger will speak at the National Healthcare Series: Midwest Real Estate Summit, Bisnow’s full-day healthcare real estate conference on Sept. 24.

A neuroscientist by training, he is also an adviser to both Farpoint and Sterling Bay, which plans to create another health and biomedical cluster at its $6B Lincoln Yards site on the North Side.  

Hockberger believes the key to fostering useful research is opening up communities to all comers, including corporate and academic researchers, as well as other companies, government agencies, venture capital firms and medical schools, that want to keep abreast of the latest technological developments in hopes of developing commercial products.

“All are critical ingredients in an innovation district that creates a pipeline of ideas that inspires practical uses for the public,” he said.

Although the developers' plans are still taking shape, experts say modern, mixed-use districts like New York’s Hudson Yards, or Sterling Bay's Lincoln Yards, which aim to help companies recruit and retain young talent by providing a 24/7 lifestyle not found in suburbs, are perfect fits for science-focused communities. 

Decades ago, research parks were typically established in the suburbs by corporations, but today, attracting scientific talent means developing districts not dominated by a single user, and mixing in office space, retail, recreational facilities, restaurants and entertainment, Hockberger said.

“That’s not unique to the scientific and engineering fields, it’s more a reflection of the times, since young people, who are going to provide innovation districts with the needed intellectual energy, are clearly opting for a different lifestyle than their parents.”

The two communities envisioned by Sterling Bay and Farpoint Development will have significant differences.

Tenants at Lincoln Yards will focus more on pure research, while Farpoint and its partners plan to also build communities where residents can take advantage of the scientific work done on campus, Hockberger said.

“What they will ask is, ‘how do we take this out of the lab and put it into practice?’”

Chib said over time this could include things like housing for seniors that utilizes the latest research on aging.   

Farpoint Development principal Scott Goodman said its location may have a leg up on competition like Lincoln Yards, or Related Midwest’s The 78 community on the Near South Side, as it doesn’t need environmental remediation or additional infrastructure.

Furthermore, the lakefront site is at the center of a cluster of significant universities, including the University of Chicago, the Illinois Institute of Technology and the University of Illinois at Chicago.

“No one is really leveraging these assets,” Chib said.  

Goodman and Chib believe the site could eventually hold roughly 12M to 15M SF, and fill a big hole on the South Side’s lakefront.

“The South Side of Chicago has been underdeveloped for a long time, but its time is now,” Goodman said.

Sterling Bay may have gotten a head start on turning Chicago into a research hub.  

The company purchased 2430 North Halsted, formerly the Stanley Manne Children's Research Institute, a five-floor, 120K SF facility, last October from Ann & Robert H. Lurie Children's Hospital, and plans to start a new life science community called Prysm Life Sciences that will recruit major life science and healthcare institutions.

Other local institutions have also begun establishing research-related clusters. The 12-story Louis A. Simpson and Kimberly K. Querrey Biomedical Research Center, designed by architecture and design firm Perkins and Will, opened this year on the downtown campus of Northwestern University. The 627K SF facility plans to host 1,500 researchers and feature nine dedicated laboratory floors.

Sterling Bay’s Prysm will also include a 20K SF life science incubator, and provide up to 30 startups with shared programming, equipment, services and networking opportunities.

Lincoln Yards is just about 1 mile from Prysm, and Hockberger said the two sites will complement one another by giving startups on Halsted a permanent home if they outgrow their incubator spaces.

Sterling Bay’s plans for the Lincoln Yards site are still fluid, but the developers are almost ready to reveal some details.

“We will discuss some of these at the Bisnow event, but I don’t want to give it away ahead of time,” Hockberger said.

Likewise, Goodman and Chib said Farpoint doesn’t yet know what its actual mix of tenants will be, and it will take at least a decade for the research community to mature. Still, they are in discussions with several potential tenants that could anchor the project’s first phase.

“By the end of the year, we expect to make a significant announcement,” Chib said.