Chicago’s life sciences industry is about to get another much-needed shot in the arm. The University of Chicago signed a partnership agreement with CIC, a Massachusetts-based operator of shared workspaces and labs, to incubate dozens of faculty-led startup companies within the university’s leased space in Hyde Park Labs, a flagship science building under construction at the corner of 52nd Street and Harper Avenue.
Although life sciences researchers at Chicagoland’s many universities often develop new therapies and drugs, the region’s lack of lab space often forced many to take their discoveries, and the jobs eventually created, to research hubs in cities like Boston or San Diego, said CIC founder and CEO Tim Rowe. But the university’s new lab space, and the opportunity to share ideas with like-minded scientists, should help change that.
“Hopefully, when they see the tools are here, more of these startup companies will stay in Chicago and more will be formed here in the first place,” he said.
The 14-story building, developed by Trammell Crow Co. and Beacon Capital Partners, will include roughly 300,000 square feet of laboratories and offices, and University of Chicago will occupy about 55,000 square feet.
Bringing CIC onboard to manage the incubator space was an easy call, said Juan de Pablo, the university’s executive vice president for science, innovation, national laboratories and global initiatives.
“It’s a tragedy that so many researchers have left Chicago for the East or West coasts, because their ideas were developed here,” he said, but universities aren’t set up to nurture startup companies. “We needed a professional entity that does that for a living.”
Chicago will need such jobs engines, as the rise in interest rates and some long-term economic uncertainty led venture capital firms to pull back from the city’s life sciences market, according to JLL Senior Managing Director Paul Giannopulos. The industry in 2022 garnered about $2.4 billion combined from venture capital firms and the National Institutes of Health, the most ever, and although NIH funding is stable, venture capital funding in 2023 is down 37% year-over-year.
Chicago-area developers went on a building spree in the past few years, putting up more than 3 million square feet of life sciences space, but many properties are filling up slowly. Sterling Bay finished its still-empty 1229 West Concord Place, a 320,000-square-foot riverfront tower on the south end of the Lincoln Yards site, earlier this year. Trammell Crow’s 400 N. Aberdeen St. in Fulton Market, the 16-story second phase of its Fulton Labs complex, opened last year and is also almost empty, according to CoStar. Fulton Labs’ first building at 1375 W. Fulton St. is more than 84% leased.
But Jonathan Metzl, office brokerage leader for Cushman & Wakefield, said the long-term outlook for life sciences is still bright.
“Chicago’s life sciences market is a young market, so most of its companies are early-stage organizations and don’t yet have huge space needs,” he said. “It will take time, a couple years to sort out, and life sciences developers are still bullish about Chicago’s market.”
Giannopulos said life sciences tenants seeking a total of 650,000 square feet are out “kicking the tires” in several Chicago buildings. And the market shows other signs of strength, including the Chan Zuckerberg Initiative, a philanthropic organization run by Priscilla Chan and Facebook’s Mark Zuckerberg, deciding earlier this year to commit $250 million toward a new Chicago biohub led by local university researchers.
Rowe said he hopes University of Chicago and CIC can help Chicago follow the path taken by Philadelphia, where in 2017 local startup Spark Therapeutics pioneered gene therapy treatment for genetic diseases. Its first product helped certain people blinded by genetic mutations to see, then spawned dozens of firms dedicated to similar research and kicked off a wave of development.
“Before you knew it, you had an industry, what is now the fastest-growing industry in Philadelphia.”
