Growing medical technology industry to change real estate market
Minnesota‘s medical technology (medtech) industry is expanding, bringing with it new real estate opportunities and challenges.
Panelists discussed the industry at a virtual event hosted on Wednesday by Minnesota Commercial Real Estate Women, a local business network. They identified a growing need for coworking and shared lab spaces as companies pursue their hybrid work models, as well as the need for new types of amenities demanded by medical technology companies – all of this could change the models. commercial real estate companies.
The two fastest growing industries in Minnesota are biosciences and manufacturing. âAnd medical technology fits neatly into those two categories,â said Terri Ulrick, director and principal of St. Paul’s architectural firm BWBR.
As companies plan their return to work in person, many medical technology companies are rethinking their physical space needs.
The personal assistance services technology company DUOS will not have physical space for each employee and will likely operate from a “hub” in Minneapolis, said Karl Ulfers, CEO and founder of DUOS. The company connects seniors who need help with daily chores and to-do lists with virtual and personal assistants.
âI don’t think we’ll ever be in a place with this business where everyone has a space under real estate,â Ulfers said. “But I think it will be essential to have a home base, where we can bring people together for our business.”
The equipment included with office space that medical technology companies wish to rent will also be subject to change. Instead of rooftop decks, a medical tech startup may opt for a room with high-quality video equipment that allows them to hold virtual meetings. These companies are also likely looking for spaces with a lot of technological capabilities, said Frank Jaskulke, vice president of intelligence, organizational strategy, global business development and startups at the Medical Alley Association.
“I am constantly amazed [by] the creativity that exists in the real estate community – both on the development and brokerage side – to create an environment that people want to live in, âsaid Jaskulke.
Medical technology companies, many of which produce medical devices or technology, are also starting to consider renting shared lab or cleanroom space. Jaskulke anticipates the expansion of this market. Medtech startups need lab space, but don’t have the capital to build such space, he said.
âI think this will be an area of ââgrowth for this region,â he said.
The region has several laboratory spaces that already meet this need, including the Saint-Paul University Corporate Labs and Incubology, located in Oakdale. Rochester also has a few labs, he says.
Several coastal technology hubs, including San Francisco and Boston, have had success with these shared laboratory spaces. Johnson & Johnson has built shared lab spaces in these communities and around the world, which translates into new investment and acquisition opportunities for the company, Jaskulke said.
These expected changes are likely to have an impact on the business models of commercial real estate companies. Specifically, new developments will look different from normal and long-term leases are likely to become less attractive to businesses, he said.
The switch to remote work will facilitate technological recruitment. Before the pandemic, remote working was a deciding factor for many applicants, Jaskulke said.
Recruiting talent in the tech industry is competitive and companies need to offer remote working options. It also allows companies to recruit from other markets, Ulfers said.
“Local businesses that may not have had to compete with some of the national brands can now have a larger pool of employers than they are trying to compete with,” Jaskulke said.
However, the lack of physical space could challenge new hires and their connection to the corporate culture – a concern Jaskulke said he heard from many members of Medical Alley.
âThe culture building part has to be so much more prescriptive and thoughtful than it was before, which is probably a positive thing in and of itself,â he said. “But it forces us all to take a step back and ask ourselves questions like the default: you have a business, you get a space, and you invest in people in the space – and that’s how you build.” corporate culture. â
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