The demand and interest in life science real estate as a home for all of the life-changing life science, biotech, and research companies has skyrocketed, especially since the start of the pandemic. And the talented professionals behind creating those innovative lab and research buildings have never been more highly valued.
Being based in San Diego, a top life science hub, we have been engaged by a number of companies looking to expand their platforms into the life science space or grow their current life science presence.
Below is a summary of what we’ve gleaned from 100+ conversations with life science development and acquisitions experts throughout the country.
- Dearth of mid-level managers: Life science developers have vertical or regional leads and analytical and administrative support, but it is very rare that they will have a true manager on their team. A manager would be someone with 7- 10 years of experience who has come up through the ranks on the technical side and may be managing a team/project, but is not the ultimate decision maker/rainmaker.
- The role of consultants: So how do life science real estate companies operate without middle-management? Cue the consultants. Many of the pieces of development are outsourced to specific consultants (i.e. someone just for entitlements, someone just for design, someone just for construction management, etc.). When identifying life science development and acquisitions talent, then, finding one person with hands-on soup-to-nuts development experience in a mid-level managerial role is not common.
- Location agnostic compensation packages: Compensation packages for life science development and acquisitions experts seem to correlate directly to their years of professional experience. Where they live and where their companies are headquartered doesn’t seem to make much of a difference despite disparities in cost of living. For example, you are just as likely to see a senior development veteran in San Diego bringing in the same compensation package as someone based in San Francisco, D.C., or Philadelphia. The average total compensation package is over half a million dollars, ranging anywhere from $300K – $1.2M+.
- Equity and upside: While common in senior management and executive positions for most CRE asset types, equity or other upside incentives are part of comp packages at nearly all levels in life science development and acquisitions roles. The upside can be substantial, averaging 30% of their total compensation package and ranging as high as 100% (on top of their base salary and cash bonus). With that magnitude of incentives tied to deals and projects, these life science experts tend to be invested in their companies for the long-haul.
The pool of people with life science development and acquisitions knowledge remains small as compared to how large of a sector life science real estate is in terms of project size, cost, and growth. That makes talent highly sought after and correspondingly compensated. As there is still a sweet spot of deals for new life science developers to make their mark before competing with the veterans on landmark projects, and plenty of capital interested in the space, it will be exciting to see what this sector and these impressive professionals continue to achieve.