4 signs your life sciences real estate portfolio is holding you back

For a leading life sciences company, an underperforming real estate portfolio isn’t just a missed opportunity.

It's a silent drain on valuable resources, eating into your procurement budget and your research and development spending. This, in turn, makes it tougher to attract and retain the best scientific talent needed to fuel growth and innovation.

To determine if your real estate portfolio is undermining your financial performance and business goals, look out for these four critical warning signs.

Capital is essential for life sciences companies to run core business activities from drug discovery to research and development. When funds are pulled away from these essential areas, such as for new equipment or attracting top talent, it inevitably slows your progress.

Having excessive capital trapped in inflexible or expensive real estate leases can become a significant problem. Every dollar stuck in an inefficient lease means it can’t be reallocated towards modern facilities, new sites or other operational enhancements that offer cost savings.

To address this challenge and free up capital, one proven solution is a sale-leaseback arrangement. This strategy allows the real estate owner to sell a property and lease it back to the occupier, immediately freeing up the capital. You can then reinvest these funds to grow your core business while using your capital more efficiently.

Constant evolution is a hallmark of the life sciences sector. An unforeseen research breakthrough, a sudden shift in market demand or the necessity to expand or downsize certain operations can all drastically alter your space requirements.

If your current leases lack flexibility, they are actively holding you back. Rigid leases often translate into wasted spending on underutilised space or hefty early termination fees. All of this will affect your budget and limit your ability to source adaptable solutions for your evolving business needs.

Ultimately, this lack of agility becomes a bottleneck, making strategic portfolio planning and rapid response to market shifts incredibly challenging.

A well-managed portfolio includes leases with carefully negotiated options for expansion, contraction and early termination. These crucial provisions allow your real estate to adapt and evolve with your company. 

A lab’s location can make or break its success. Optimal locations offer immediate access to key talent pools and thriving innovation clusters, fostering vital collaborations with leading universities, research hospitals and other biotech firms.

This emphasis on talent aligns with industry priorities, with 73% of biopharma and biotech executives surveyed by JLL highlighting talent acquisition and retention as key to company success.

Conversely, a poorly chosen site inflates operational expenses due to inefficient logistics, extended supply chain lead times and higher talent recruitment costs, undermining cost efficiency and business decisions.

Your lab location also affects supply chain efficiency such as your access to raw materials and distribution of finished products. Unfavourable tax structures or a lack of local incentives can further erode your bottom line.

A misfit location puts your business at a disadvantage, driving up costs, making it harder to find talent and weakening your competitive edge.

Like any complex asset, laboratories age. Older facilities typically suffer from inefficient systems, outdated layouts and poor energy performance, which results in a low return on investment (ROI).

Ageing labs are a clear drain on the budget, leading to higher utility bills, maintenance costs and capital expenditures for frequent repairs.

These outdated spaces are a missed opportunity for enhancing your portfolio value. They lower the worth of your assets and make it tougher to build the modern, collaborative environments essential for attracting and retaining talent. Moreover, procurement teams often face higher costs and reduced options for integrating new, efficient lab equipment into outdated infrastructure.

Improving these spaces might involve upgrading infrastructure, reconfiguring layouts or relocating to a modern, energy-efficient facility. The goal is to transform your lab from a cost centre into a high-performing asset that supports, rather than hinders, your scientific ambitions.

Don't let these four warning signs hold your business back. Schedule a portfolio assessment with a JLL life sciences expert today and discover how to rethink your real estate portfolio.