Baltimore's Bounty Of Biotech Talent Hasn't Had Enough Lab Space. That Could Be About To Change

Few places have ridden the Covid biotech boom as successfully as Maryland.

The Old Line State is home to the Food and Drug Administration and National Institutes of Health, and it has seen billions of dollars from the nation’s Covid-19 vaccine program flowing into its suburban I-270 corridor. It has become a hotbed for biomanufacturing and a leading lab market, home to burgeoning firms like Ellume and Novavax. A recent Newmark report found 2.7M SF of life sciences space under some stage of development or renovation statewide.

But when it comes to Maryland's biggest city, that promise hasn't been fully realized.

Baltimore boasts world-class institutions like the University of Maryland's medical school and Johns Hopkins University, but the problem, said developers and economic development experts, isn’t a lack of talent or ideas — Johns Hopkins alone spent nearly $3B on research in 2019 — but a lack of space for growing startups spun out of the city’s schools.

But new developments in the works, and the increasing demand for space nationally as top-tier markets like Boston become increasingly crowded, may change Baltimore’s trajectory. Alexandria Real Estate Equities, the nation’s leading life sciences real estate developer, is even developing a six-story, 170K SF lab building at Port Covington, a multiuse, multibillion-dollar waterfront development anchored by Under Armour.

“This will position Baltimore well for capturing a segment of the market,” Alexandria co-CEO Stephen Richardson said. “The momentum is moving that way.”

Key institutions and organizations in the city realized the importance of developing lab space relatively recently compared to other research hubs, experts said, leading to a lack of overall lab space during this current biotech boom. 

“This wasn’t something the city or universities was focused on,” said Christy Wyskiel, the senior adviser to Johns Hopkins' president for innovation and entrepreneurship, which works with new firms and life sciences startups. 

But that lack of focus has started to sharpen with an expanding pipeline of projects. The University of Maryland partnered with developer Wexford Science + Technology to build 280K SF of labs to connect the UMD BioPark and the University of Maryland, Baltimore, on the city’s west side, and JHU is taking a combined 500K SF of wet lab space at a trio of new developments at Eager Park in East Baltimore, the Baltimore Sun reported.

Port Covington, the city's most ambitious private development in decades hatched by Under Armour CEO Kevin Plank, has been reimagined as a potential life sciences hub by Alexandria and other developers. Just off I-95 in South Baltimore, the site could pull the center of the state’s biotech gravity eastward.

Baltimore Development Corp. President and CEO Colin Tarbet said part of the city’s challenge is just the nature of operating in an urban environment, including higher real estate costs and the difficulties of attracting developers when cheaper options exist in nearby suburbs like Montgomery County. Existing lab space in city limits, concentrated in a pair of bioparks run by the universities, is overwhelmingly multi-tenant, multistory structures set up for incubation spaces for new startups. Single-story suburban development offers more affordable options for startups and developers, even though they are located farther away from the universities that spin out new ideas and firms. 

The BDC's recent five-year plan underscores the need to develop more lab space for the city’s growing startups, noting that the number of bioscience research spinoffs has “increased dramatically” over the past decade, but getting them to stay requires direct action, including lowering leasing costs and creating flexible lease terms. 

“That’s the real issue, and the only issue,” his BDC colleague, Justin Lang, said about the real estate problems hindering Baltimore biotech. “There’s no problem with the talent issue, the research dollars Johns Hopkins is bringing in are incredible. Vacancy for wet lab space in Baltimore, for that reason, has been stagnant at 1% for years.” 

What Baltimore lacks isn’t just lab space, but specifically larger spaces for growing startups. 

Weller Development partner Steve Siegel, whose firm is the master developer for Port Covington, attributes it to the sophomore slump — small startups looking to graduate from incubator spaces can’t forecast their space needs and don’t have the capital to anchor an entire building, uncertainty which makes it hard to land funding and capital for graduate space.

“Baltimore, and the state of Maryland in general, is rich in life sciences, data sciences and technology talent with many innovative startups, but lacks a highly accessible, entrepreneurial environment where companies like these can flourish among one other,” he said.

Port Covington may be part of the answer. In addition to Alexandria’s project, a new life sciences-focused conversion on-site, City Garage, will add Class-A facilities to the nascent neighborhood’s mix of maker spaces, retail, restaurants, shops, streetscapes and parks. The entire 200-acre development offers millions of entitled square feet for potential lab space, a small portion of which has been developed thus far.

“Creating a world-class, highly accessible, amenity-rich, waterfront environment where life sciences, data sciences and other technology companies can share ideas and cross-pollinate will result in an outcome where the whole is greater than the sum of the parts,” Siegel said. 

Richardson said Alexandria sees the activity at Port Covington as an example of the campus model the firm has specialized in, a sign of changing priorities and a regional commitment to Baltimore life sciences. The lack of large-scale campuses with which to grow the industry have been a “limiting factor” for the city, he said, and the coordination between city and state officials, and the engagement needed to make the project happen suggests a new level of activity around expanding the city’s lab space pipeline.

To build on that momentum, Tarbet says the BDC is looking at providing incentives to get more developers to build in Baltimore. There isn't an appetite for speculative lab development, so the city needs to be a catalyst. Many of its growing businesses are startups that won’t sign long multi-year leases. It’s clear even with these new developments moving forward, the city is still a ways away from significant expansion of immediately available lab space.

“All the startups I’m working with, young companies waiting for that 15K SF lab, the city won’t be able to accommodate them immediately,” Wyskiel said. “We don’t have the large company footprint here yet. We have a lot of growth companies.”