General construction inflation
pushes lab rehab costs upward
By Stanley Stark, AIA, and Regis Gaughan, PE
The
factors that are pumping new-construction costs this year—high commodity
prices, rising labor costs, and surges in building activity—are also significantly
inflating lab renovation costs. The average increase for most types of lab renovations
is in the 20 to 30% range for 2005.
HLW International LLP, New York, N.Y., and its cost-estimating consultant,
Accu-Cost Inc., have been publishing lab construction and renovation cost reports
annually since 1994. Last month we focused on new construction in domestic markets;
this month we’ll look at renovation costs as well as new construction costs
in international markets. (Refer to page 2 of the June issue for information
on how these statistics are compiled.)
click image to enlarge
Costs by facility type
The table below gives a summary of renovation
cost ranges for various common lab facility types. Costs in this chart are pegged
to the renovation market in the tri-state New York metropolitan area, within
50 miles of midtown Manhattan, but excluding the five boroughs of New York City
(which have dramatically higher costs). Costs in domestic regional markets and
international markets might be higher or lower.
Assumptions for each type of facility, and the forecast average
annual percentage changes compared with 2004 costs, are as follows:
Biomedical (1). Major academic research center buildings that tend to be
biology-
intensive and chemistry-light, built since 1980. Assumptions include better
available infrastructure, little or no across-the-board systems upgrades, general
conformance with current codes, and manageable planning scenarios. Cost increase
in average facility rehab from 2004 level: 28%.
Biomedical (2). Academic research centers as described above, but built earlier
(pre 1980). Assumptions include outdated, non-adaptable MEP infrastructure,
necessary upgrades to a wide variety of other systems, multiple code challenges,
and significant premiums for overtime work. Ranges are 30% higher than for
rehabs of biomed facilities discussed in category 1 above, and approach the
costs for new construction. Cost increase from 2004: 24%.
Chemistry research. Oriented toward organic/ synthetic combinatorial, medicinal,
and structural chemistry. Cost increase from 2004: 18%.
Biology research. Full range of basic and developmental biology sciences.
Cost increase from 2004: 45%.
Analytical chemistry. Development-phase quality control, and QC in support
of manufacturing. Cost increase from 2005: 25%.
Software development. Mix of dry labs with raised floor, and office space.
Cost increase from 2004: 29%.
Hardware development. Same as software, with some physics and wet labs and
some environmental and cleanroom spaces. Cost increase from 2004: 25%.
GMP production. Part of a larger building or facility, representing only
part of the full building cost. Class 10,000 spaces encompass staging, cleaning,
and assembly; cost increase from 2004: 23%. Class 1,000 spaces may be used
for solid dosage from production and other purposes; cost increase from 2004:
22%. Class 100 facilities are suitable for sterile filling and preparations;
cost increase from 2003: 15%.
BSL-3 lab spaces. Change from 2004: 42%.
BSL-4 lab spaces. Change from 2004: 32%.
Greenhouses. Change from 2004: 33%.
Variations within facility type
As noted in the table, facilities that fall into
identical categories may display a fairly broad range of ft² renovation
costs. Level of invasiveness is the determining factor. The low end of the cost
range
represents minimally invasive work, such as:
Cosmetic upgrade of lab space (countertops, finishes).
Modest additional infrastructure in the form of additional outlets or piped
service locations.
Minor replacement of in-lab, above-ceiling MEP outlets, ductwork, and lighting.
Minor bench removal and reconfiguration.
Minor repartitioning and new doorways to create new spaces or links between
spaces.
The high end of the range assumes the total replacement of lab corridor and support
space, including MEP infrastructure. Only the building shell itself is reclaimable.
Everything in between the high and low numbers represents an increasing
extent of system replacement, new construction, and quality of finishes.
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Small-scale refurbishments
As a practical matter, small-scale, focused
refurbishments have become a popular method of implementing improvements to the
lab environment in response to the volatile and fast-moving pressures of the
R&D marketplace. Limited in both scope and cost, and easily accomplished
in a short time, these targeted upgrades are an effective method of achieving
improvements to meet evolving demands.
The table on page 9 (bottom right) shows typical small-scale refurbishment
costs in the New York metro area. Such costs do not vary significantly by location
because labor costs are a smaller cost component of many of these items. Costs
outside of the major high-cost urban centers will be within 85 to 90% of the
costs reported in the table.
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Fig. 1. International market construction costs, indexed to the New York tri-state metro area at 100.
International markets
The June issue (page 4) reviewed new construction
costs for various domestic markets. International costs, as benchmarked to the
New York tri-state metro area, are shown in Fig. 1 (left).
Local economic factors, as well as worldwide construction market
trends and materials shortages, will likely force new construction costs up in
almost all international markets, compared with last year (data not shown). Costs
relative to the New York metro benchmark are predicted to rise by about 5% in
all European markets tracked in this report, except for Munich and Paris, where
10% increases are predicted. Asian metros are also experiencing significant cost
increases relative to the New York benchmark. All Asian markets are predicted
to gain at least 5%; Bangkok, Hong Kong, Jakarta, and Shanghai will rise 10%;
and Beijing, a whopping 30%. (Last year Bejing was ranked at just 90% of New
York tri-state metro costs; this year it’s at 120%.) Canada, where academic
research construction is brisk, is now at 95% of the New York benchmark, up 5%
since last year. Only Mexico pricing remains flat, continuing at 65% of the benchmark.
Worldwide, it’s getting harder and harder to find big-city
locations that offer any construction price advantage compared with New York
costs. In Europe, only Barcelona, Brussels, and Copenhagen are cheaper; in Asia,
only Seoul and Shanghai. The hot metros of Beijing, Hong Kong, Kuala Lumpur,
Osaka, and Taipei remain considerably more expensive for building research facilities
than the New York metro area.
Stanley Stark, AIA (sstark@hlw.com) is managing partner at HLW International
LLP, New York, N.Y. (www.hlw.com). Regis Gaughan, PE (rgaughan@hlw.com) is
also a managing partner of the firm. Additional information was provided by
Ed Mermelstein, principal, Accu-Cost Construction Consultants (212-687-2121,
emermelstein@accucost.com).
