Lab rehab costs rising to approach those of new construction By Stanley Stark, FAIA Part 2: Renovation and international costs As discussed in the July issue (page 1), new lab construction costs this year are expected to rise by 6 to 10%, with the higher end of the range occurring in major research hubs. Drivers include high oil prices, spikes in commodity prices, aggressive labor demands, and an active construction market. Renovation costs are pulling ever closer to those of new construction, pumped up by price increases this year from 8 to 22%, depending on facility type. Most types of lab renovations will see increases between 10 and 17%—higher than annual cost increases for new construction. 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 3 of the July issue for information on how these statistics are compiled.) 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 may be higher or lower, as shown on page 2 of the July issue as well as in the chart below. 2007 renovated R&D facility construction costs Building type 2006 $/gsf 2007 $/gsf Biomedical facility (1)* 350-425 425-500 Biomedical facility (2)* 375-450 450-525 Animal research facility 425-475 500-600 Toxicology facility 425-475 475-575 Chemistry research facility 425-475 574-575 Biology research facility 350-425 400-500 Analytical chemistry facility 290-325 325-375 Software development lab 200-300 275-375 Hardware development lab 280-328 350-400 GMP production facility     Class 10,000 425-550 500-600 Class 1,000 625-750 750-850 Class 100 900-1,000 1000-1200 BSL-3 450-500 500-575 BSL-4 500-550 550-600 Greenhouse 275-350 325-400 K-12 biology/chemistry teaching lab n.a. 350-400 Advanced phusical science research facility n.a. 750-850 Nanotechnology research facility n.a. 575-775 *See main text for explanation of variations between Biomedical 1 & 2 Source: HLW International LLP and Accu-Cost Research facility renovation costs (gross ft2), based on typical costs for an average project in the New York Metropolitan/TriState area. Assumptions for each type of facility, and the forecast average annual percentage changes compared with 2006 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 2006 level: 8%. • 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 15% higher than for rehabs of biomed facilities discussed in category 1 above, and approach the costs for new construction. Cost increase from 2006: 15%. • Animal research. Discovery-phase animal research, procedural spaces, non-GLP systems. Cost increase from 2006: 13%. • Toxicology. Safety evaluation phase R&D, Phase 1-4 testing, GLP systems. Cost increase from 2006: 12%. • Chemistry research. Oriented toward organic/synthetic combinatorial, medicinal, and structural chemistry. Cost increase from 2006: 12%. • Biology research. Full range of basic and developmental biology sciences. Cost increase from 2006: 12%. • Analytical chemistry. Development-phase quality control, and QC in support of manufacturing. Cost increase from 2006: 17%. • Software development. Mix of dry labs with raised floor, and office space. Cost increase from 2006: 22%. • Hardware development. Same as software, with some physics and wet labs and some environmental and cleanroom spaces. Cost increase from 2006: 18%. • 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 2006: 10%. Class 1,000 spaces may be used for solid dosage form production and other purposes; cost increase from 2006: 18%. Class 100 facilities are suitable for sterile filling and preparations; cost increase from 2006: 11%. • BSL-3 lab spaces. Change from 2006: 10%. • BSL-4 lab spaces. Change from 2006: 9%. • Greenhouses. Change from 2006: 19%. • K-12 biology/chemistry teaching labs. Cost increase from 2006 not applicable, data first provided in 2007 survey. • Advanced physical science research. Unique, state-of-the-art facilities with apparatus that replicates nature itself. Cost increase from 2006 not applicable, data first provided in 2007 survey. • Nanotechnology research. Cost increase from 2006 not applicable, data first provided in 2007 survey. Variations within facility type As noted in the table above, 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. 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 below shows typical small-scale refurbishment costs in the New York metro area, as well as in urban New York City. Costs outside of the major high-cost urban centers will be within 85 to 90% of the costs reported for metro New York; costs in urban centers may be closer to the New York City numbers. Component pricing for small-scale refurbishing Item Cost installed (NYC metro area) Cost installed (New York City) Install & reconnect exsting fume hoods to exsting ductwork $7,000 each $8,000 each Purchase & install new 6-ft fume hoods and connect to exsting ductwork $13,000 each $16,500 Re-run piping $21-30/linear ft $23-35/linear ft Re-run & install piping to benches (4 services plus outlets) $34/linear ft $38/linear ft Install new epoxy resin benchtops for 5-ft bench $350-500/linear ft $500-650/linear ft New island bench $800-850/linear ft $1,050-1,200/linear ft End sink $4,000 each $4,500 each Install new 2 x 4 fluorescent lighting fixtures $500 each $550 each New mylar finished acoustical ceiling tile w/ grid $10/ft2 $15/ft2 New flooring (not counting removal), vinyl composite tile $3.75/ft2 $4.25/ft2 New flooring (not counting removal), seamless vinyl, heat sealed $11/ft2 $14/ft2 Run dedicated outlet from existing panel with new circuit breaker to outlet 50 ft away $825 each $1,000 each Source: HLW International and Accu-Cost International markets The July issue 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 (below). Fig. 1. International market construction costs, indexed to the New York City metro area at 100. Click to enlarge. Local economic factors, as well as worldwide construction market trends and materials shortages, will keep increases fairly modest in most international cities relative to the benchmark, compared with last year (data not shown). Costs relative to the New York Tri-State metro benchmark are predicted to rise by about 5% in Brussels and Paris; other European locations are expected to maintain 2006’s index percentage. Many Asian metros are also experiencing cost increases relative to the New York benchmark. Bangkok, Hong Kong, Kuala Lumpur, Seoul, Shanghai, and Taipei are predicted to gain at least 5% relative to the benchmark; other Asian metros are expected to maintain 2006’s index percentage. The exception is Beijing—still extremely expensive at 120% of the index, but down 5% from last year’s 125% level. Canada, where academic and medical research construction are brisk, is now at 105% of the New York benchmark, up 5% since last year and 10% since 2005. Mexico’s pricing is expected to remain at 70% of the benchmark, the same as in 2006. Worldwide, it’s getting harder and harder to find locations that offer any construction price advantage compared with the New York benchmark. In Europe, only Barcelona and Liverpool are less expensive, and none of the Asian markets tracked in this report are cheaper. Asian metros range from 105 to 155% of the benchmark costs; Singapore, new in the index this year and the site of major science construction, is at 130%. Stanley Stark, FAIA, is managing partner at HLW International LLP, New York, N.Y. (www.hlw.com). Additional information was provided by Ed Mermelstein, principal, Accu-Cost Construction Consultants (212-687-2121, emermelstein@accucost.com).