Market segments
- Pre-clinical biotech
- Clinical-stage biotech
- Late-stage / commercial biotech
- Big Pharma (Pfizer, Merck, Lilly)
- Medical device
- Diagnostic / lab-services tenants
- Academic institutional
Life Science KPIs.
Life Science buildings serve biotech, pharmaceutical, and medical-device R&D tenants with specialized lab + office space. The buildings have substantially higher TI cost ($300-600 PSF) than standard office due to lab buildouts (HVAC, plumbing, vibration isolation, biosafety levels). Performance is measured in rent PSF (50-150% premium to office), tenant credit, and cluster proximity (Cambridge, South San Francisco, San Diego concentrate the demand). Comparable REITs: ARE (Alexandria — pure-play), HCP (Healthpeak — diversified). Demand driver: NIH funding + biotech VC + pharmaceutical R&D spend. Lease terms typically run 10+ years to amortize the higher TI investment. Ilora.ai ingests lease abstracts with TI + office/lab ratio, specialized HVAC + vibration spec sheets, tenant credit underwriting (often pre-revenue biotechs), AAALAC accreditation, and BSL (Biosafety Level) classification, then benchmarks against ARE (Alexandria — pure-play, ~$20B market cap), DOC/HCP (Healthpeak), KRC growing life-science segment, and BMR (BioMed Realty — Blackstone-acquired). BIO, I2SL, MassBio, and BayBio are canonical industry organizations.
11 definitions · Sector: SPECIALTY · Used by Ilora.ai specialist AI agents
- NOI
- Total revenue minus operating expenses (excludes financing and capital costs). The primary measure of property-level profitability.
- Cap Rate
- Net Operating Income divided by current property value. Expresses unleveraged annual yield as a percentage.
- DSCR
- Net Operating Income divided by total annual debt service. Lender-required cushion measure; below 1.0 means NOI cannot cover debt.
- LTV
- Loan amount divided by property value. Lower LTV = lower lender risk.
- OER
- Operating expenses divided by gross revenue. Lower is better, but varies by property type (hotels run higher than triple-net retail).
- GRM
- Property value divided by gross annual rental income. Quick valuation shortcut; less precise than cap rate.
- IRR
- Annualized return on investment accounting for time value of money across the full hold period.
- CoC
- Pre-tax annual cash flow divided by total cash invested. Measures the cash yield, not total return.
- DCF
- Valuation method that projects future cash flows and discounts them to present value at a chosen rate.
- TTM
- A rolling sum of the most recent 12 months. Smooths seasonality for KPI comparisons.
- Rev PSF
- Revenue per leasable square foot. Universal specialty-property comparable.
Net Operating Income
NOI = Revenue − Operating Expenses
Capitalization Rate
Cap Rate = NOI ÷ Property Value
Debt Service Coverage Ratio
DSCR = NOI ÷ Annual Debt Service
Loan-to-Value
LTV = Loan Amount ÷ Property Value
Operating Expense Ratio
OER = Operating Expenses ÷ Gross Revenue
Gross Rent Multiplier
GRM = Property Value ÷ Gross Annual Rent
Internal Rate of Return
Cash-on-Cash Return
CoC = Annual Cash Flow ÷ Total Cash Invested
Discounted Cash Flow
Trailing Twelve Months
Revenue Per Square Foot
Sub-types
Sub-types within Life Science.
- Pure Lab Building
- Wet + dry lab space, minimal office; serves bench-research-heavy tenants.
- Lab + Office Mixed
- Common 50/50 lab/office split; serves clinical-stage biotechs.
- Class B Conversion
- Older office or industrial buildings converted to lab.
- Build-to-Suit
- Custom-built for single tenant; 10-15 year leases with high TI.
- GMP Manufacturing
- cGMP-compliant pharmaceutical / cell therapy manufacturing facilities.
Amenities & features
8 amenities Ilora.ai tracks for Life Science.
- Wet Lab Space
Lab benches with sinks, fume hoods, biosafety cabinets. Drives premium TI cost.
- Wet lab PSF as % of building
- Wet lab rent premium
- Vibration-Isolated Floors
Reinforced floors for sensitive instruments (microscopes, mass spec). Often required for ground/sub-floor.
- Vibration spec (VC-A, VC-B, VC-C)
- High HVAC Capacity
6-12 air changes per hour vs office 2-4. Drives utility cost.
- Air changes per hour
- HVAC kW per SF
- Backup Power (Generators)
Critical for cell + tissue cultures, freezer storage. Often N+1 or 2N redundancy.
- Generator capacity
- Backup runtime hours
- Cold Storage (-80°C Freezers)
Walk-in cold rooms + freezer farms for biological sample storage.
- Cold storage volume
- Freezer redundancy
- Vivarium / Animal Facilities
AAALAC-accredited animal research facilities (rodent, large animal).
- Vivarium capacity (cages)
- AAALAC accreditation status
- Loading + Bulk Receiving
Specialized loading dock for cryogenic, hazardous, oversized lab equipment.
- Loading dock count
- BSL-2 / BSL-3 Capability
Biosafety Level 2 standard; BSL-3 for select agents (rare premium feature).
- BSL designation
Industry reference
How the life science sector operates.
Operating models
- Owner-operated
- REIT-owned + leased to tenants (ARE dominant)
- University-affiliated research park
- Build-to-suit single-tenant
- Lab-as-a-Service (Lab Central, Biolabs — co-working lab model)
Regulatory frameworks
- NIH grant compliance for academic tenants
- OSHA Bloodborne Pathogens Standard
- CDC/NIH Biosafety in Microbiological and Biomedical Laboratories (BMBL)
- EPA hazardous waste handling
- FDA cGMP for manufacturing
- AAALAC for animal facilities
- Local zoning (industrial/research overlay)
Industry organizations
- BIO (Biotechnology Innovation Organization)
- CoreNet Global (real estate)
- I2SL (International Institute for Sustainable Laboratories)
- NAIOP (CRE)
- Massachusetts Biotechnology Council (MassBio)
- BayBio (California Life Sciences)
- JLL Life Sciences group
- CBRE Lab Sciences group
Comparable public REITs / operators
- ARE (Alexandria Real Estate Equities — pure-play)
- HCP / DOC (Healthpeak Properties — life science segment)
- BMR (BioMed Realty — acquired by Blackstone)
- KRC (Kilroy Realty — growing life science segment)
- BXP (Boston Properties — life science partnerships)
- IIPR (Innovative Industrial Properties — cannabis adjacency)
Documents Ilora.ai ingests
- Lease abstract with TI + office/lab ratio
- Specialized HVAC + vibration spec sheets
- Tenant credit underwriting (often pre-revenue)
- NIH grant award documentation (academic tenants)
- Capital plan (lab refresh + manufacturing buildout)
- Building Energy Use Intensity (EUI) report
- AAALAC accreditation (vivarium tenants)
- BSL classification documentation
Industry tools (we integrate with these)
- Yardi Commercial
- MRI Commercial
- Argus Enterprise
- CoStar Life Sciences
- JLL Life Sciences Insights
- BioReady (lab readiness platform)
- Honest Buildings (capital projects)
- Salesforce (sales/leasing CRM)
Frequently asked
Common questions about life science.
- What makes life science buildings different from office?
- Life science buildings have 50-150% higher rent PSF than office due to specialized lab requirements: 6-12 air changes per hour HVAC (vs 2-4 office), vibration-isolated floors, fume hoods + biosafety cabinets, backup generators, cold storage. Tenant Improvement (TI) costs run $300-600 PSF vs $50-150 PSF office. Lease terms are typically 10+ years to amortize the higher TI investment.
- Which markets concentrate life science real estate?
- Three super-clusters dominate US life sciences: Greater Boston (Cambridge, Kendall Square, Seaport — ~40M SF), San Francisco Bay Area (South SF, Mission Bay — ~30M SF), and San Diego (UTC, Sorrento Mesa, Torrey Pines — ~15M SF). Emerging clusters: Research Triangle (NC), Maryland I-270 corridor, Boulder/Denver, Seattle. ARE (Alexandria Real Estate) has dominant exposure in all three super-clusters.
- How are life science buildings valued?
- Life science buildings trade at premium cap rates compressed by tenant credit (Big Pharma vs pre-clinical biotech), cluster location (Cambridge premium), lab/office ratio (more lab = higher rent + premium), and lease term. Class A Cambridge lab trades 4.0-4.75% cap rates; Class B suburban lab 5.5-6.5%. ARE (Alexandria) public filings are the canonical comp source — they disclose rent PSF and tenant mix in detail.