7 Essential Tips for Leasing Your First Lab Space

By the Hughes Marino Life Science Team

Leasing your first lab space is one of the most consequential real estate decisions a life science company will make. Unlike a standard office lease, lab facilities require specialized infrastructure, longer lead times and carefully negotiated terms that protect your capital, your team and your long-term growth trajectory. Whether you’ve just secured your first round of funding or are ready to graduate from an incubator, this guide covers seven proven tips that help life science tenants secure the right lab space on the most favorable terms. From completing a thorough needs assessment to protecting yourself against skyrocketing tenant improvement costs, these strategies ensure you enter the market prepared, and not scrambling.

Hughes Marino’s Tenant-First Approach to Life Science Real Estate

In a commercial real estate environment where landlords hold significant leverage, and particularly in competitive life science submarkets, having a dedicated tenant representative is a critical advantage. Hughes Marino’s life science team operates exclusively as a tenant advocate, delivering conflict-free advisory and negotiation services focused entirely on your company’s scientific and financial goals, not property owner interests. Unlike traditional brokerages that serve both landlords and tenants, Hughes Marino’s fiduciary commitment means every recommendation, clause and negotiation strategy is designed to advance your objectives without compromise.

This tenant-first philosophy is backed by integrated in-house expertise, which includes attorneys, financial analysts and life science market specialists, who collaborate to reduce risk and optimize costs throughout the leasing process. Whether you’re searching for wet lab space, dry lab space or a hybrid office-lab configuration, Hughes Marino’s proprietary strategies address complex scenarios such as phased move-ins and specialized infrastructure buildouts. By aligning real estate decisions with your scientific operations and funding milestones, tenant representation transforms lab space leasing from a stressful search into a strategic business advantage.

1: Get Started Earlier Thank You Think

One of the most common and costly mistakes life science companies make is waiting too long to begin their lab space search. Unlike a standard office, lab space almost never comes move-in ready. Every tenant has different scientific requirements, meaning the space will likely need to be converted or renovated to meet your specific operational needs before you can begin work.

A tenant improvement (TI) buildout refers to the construction or renovation work required to customize a raw or previously occupied space for a tenant’s operations, including specialized plumbing, electrical, HVAC and lab infrastructure. For permitting, design and construction, the typical required timeframe is 10-12 months—and that’s for a moderately sized space in a cooperative jurisdiction.

Starting your search at least 6-12 months before your target occupancy date is critical for several reasons:

• Permitting delays: Local jurisdictions often have multi-month queues for lab-related permits
• Construction lead times: Specialized contractors and materials take time to source
• Negotiation runway: Rushing a lease puts leverage squarely in the landlord’s hands
• Space availability: The best spaces in core life science submarkets lease quickly and with limited notice

If you don’t give yourself adequate lead time, you’ll be limited to turnkey or shell spaces requiring minimal customization, drastically reducing your options and potentially forcing you to compromise on critical infrastructure.

2: Complete a Thorough Needs Assessment

Before approaching a single landlord or touring a single building, document exactly what your lab requires. A needs assessment is a written summary of your company’s technical, operational and spatial requirements that serves as the foundation for all lease negotiations and space evaluations.

Your needs assessment should cover:

Utility demands: Electrical load, water and waste requirements, gas lines and specialized mechanical needs

Infrastructure requirements: Single-pass air systems, ISO classifications, tissue culture rooms, chemistry fume hoods, cold rooms, clean rooms and dry rooms

Square footage: Calculate required lab and office square footage, factoring in building common area factors (typically 10-20%) and any amenity space add-ons

Headcount planning: Map current staff to space and project growth over the first two years of the lease term

Space Category	Key Considerations
Wet Lab	Fume hoods, biosafety cabinets, floor drains, chemical storage
Dry Lab/Computational	High-density power, server cooling, data infrastructure
Office/Write-Up Space	Ratio to lab square footage, collaboration areas
Shared/Amenity Space	Conference rooms, break rooms, equipment bays

Planning for both your current needs and foreseeable requirements during the first two years of the lease term ensures you avoid outgrowing your space prematurely, or over-committing to square footage you can’t fill.

3: Think Strategically About Recruiting and Retention

Lab space isn’t just a scientific asset, but also a talent asset. The location of your facility directly affects your ability to attract and retain the scientists, engineers and operations staff your company depends on. When evaluating locations, consider where your current and future team members live, commute from and prefer to work.

Most life science lab space is concentrated in established core submarkets such as Mission Bay and South San Francisco (Bay Area), Kendall Square (Boston), UTC and Torrey Pines (San Diego), Research Triangle Park (Raleigh-Durham), Seattle, Houston and Midtown South (New York). These clusters offer proximity to research institutions, venture capital, CROs and a deep talent pool, but they also command premium rents and limited availability.

However, emerging life science submarkets are increasingly offering competitive alternatives with newer infrastructure, lower rents and easier commutes for employees outside the urban core. A tenant representative with deep market knowledge can identify which emerging corridors offer viable options and which ones lack the ecosystem your company needs.

Questions to ask when evaluating a location:

• Are peer companies and research institutions nearby to enable collaboration?
• Is the building accessible via public transit or major commuting corridors?
• Are there nearby amenities, including restaurants, fitness facilities and childcare, that support employee satisfaction?
• Does the submarket’s talent pool align with your hiring plan?

4: Align Your Lease Commitment with Your Cash Runway

Real estate commitments carry significant financial obligations, and for early-stage life science companies, misaligning lease terms with funding timelines can create serious risk. Before signing any lease, model how long your current cash will last and map your real estate obligations against your anticipated next funding event.

Cash runway refers to the amount of time a company can continue operating at its current burn rate before running out of capital. For pre-revenue life science companies, this metric is the single most important factor in determining how long a lease term is prudent to sign.

Key financial considerations include:

• Lease length vs. funding milestones: Avoid committing to a 10-year lease if your next major funding round is 18 months away, as your company’s size and needs may change dramatically
• Phased occupancy: Negotiate the ability to delay occupancy or phase into larger footprints as headcount grows and capital becomes available
• Termination options: Build in early termination rights or contraction provisions in case a clinical outcome or funding event requires a strategic pivot
• Security deposit structure: Understand how much capital will be tied up in security deposits and letters of credit, and negotiate burn-down schedules as lease milestones are met

Aligning real estate strategy with capital planning is one of the most valuable services a tenant representative provides. Hughes Marino’s financial analysts model full-term occupancy costs, including escalations, operating expenses and TI repayment, against funding scenarios to ensure your lease never outpaces your runway.

5: Budget for Operating Expenses Beyond Base Rent

A common budgeting mistake among first-time lab tenants is focusing exclusively on base rent and overlooking operating expenses, which can add $0.90-$1.50 per SF, or more, to monthly occupancy costs. Almost all lab leases are structured on a triple net (NNN) basis, meaning operating expenses are passed through to the tenant in addition to base rent.

A triple net (NNN) lease is a lease structure in which the tenant is responsible for paying base rent plus their pro-rata share of the building’s operating expenses, including property taxes, the landlord’s insurance and common area maintenance (CAM) charges.

Operating Expense	What it Covers
Property Taxes	Tenant’s pro-rata share of real estate taxes assessed on the building
Insurance	Landlord’s property and liability insurance premiums
CAM Charges	Maintenance, janitorial, landscaping and utilities for common areas
Management Fees	Landlord’s property management costs (typically 3-5% of base rent)

To budget accurately:

• Request a full operating expense history for the building covering the past two to three years
• Confirm which expenses are capped or excluded in the lease
• Model escalation of operating expenses at 3-5% annually over the full lease term
• Compare competing properties on total occupancy cost, not just face rent

Understanding the full NNN structure before you sign ensures there are no surprises on your monthly invoice and gives your CFO an accurate picture of real estate costs for financial forecasting.

6: Obtain a Realistic TI Cost Estimate Before Signing

Tenant improvement costs for life science space have escalated significantly in recent years, driven by supply chain constraints, specialized contractor demand and the complexity of wet lab buildouts. If you sign a lease without first obtaining a realistic construction cost estimate, you may find that the TI allowance you negotiated falls well short of actual buildout costs, leaving your company with a significant and unexpected capital exposure.

A tenant improvement (TI) allowance is a dollar amount per square foot that the landlord agrees to contribute toward customizing the space for the tenant’s use. For life science space, TI allowances typically range from $100-$300+ per SF depending on the market, scope of work and lease term length.

Before signing any lease, tenants should:

• Engage a qualified general contractor or construction manager to provide a preliminary cost estimate based on your needs assessment
• Identify the gap between the landlord’s TI allowance and your estimated build-out cost
• Negotiate for additional allowance, above-standard landlord work or phased construction to close any gap

• Confirm whether unused TI can be converted to rent abatement or additional cash credits

TI Scenario	Risk Level	Recommended Action
TI allowance covers full buildout cost	Low	Confirm scope in writing and track closely
TI gap of 10-20% of buildout cost	Moderate	Negotiate additional allowance or phased delivery
TI gap exceeds 20% of buildout cost	High	Renegotiate terms or evaluate alternative spaces
No TI allowance offered	Critical	Seek different space or negotiate substantial rent abatement

Hughes Marino’s project management team works alongside tenants to develop accurate pre-lease construction budgets, ensuring your negotiated TI package reflects actual buildout costs rather than optimistic landlord estimates.

7: Prepare a Comprehensive Equipment List

Lab equipment is one of the most overlooked line items in a first-time lab tenant’s budget, and one of the most consequential. Before finalizing your space requirements or signing a lease, compile a complete inventory of every piece of equipment you will need to operate from day one, covering both specialized scientific instruments and standard office equipment.

A capital expenditure (CapEx) plan is a financial forecast of the major equipment and infrastructure investments required to operationalize a new facility. For life science companies, CapEx planning should precede lease execution, because equipment requirements directly influence space design, infrastructure specifications and buildout costs.

Your equipment inventory should include:

• Scientific equipment: Biosafety cabinets (BSCs), autoclaves, centrifuges, PCR machines, microscopes, incubators and -80°C freezers
• Infrastructure-tied equipment: Fume hoods, cold rooms, gas line connections and high-capacity electrical drops
• Shared / common equipment: Copy machines, printers, AV systems and kitchen appliances
• IT infrastructure: Servers, network equipment and specialized computational hardware

For companies where capital is constrained, incubator options provide access to shared equipment at a lower upfront CapEx burden, though at a premium per-square-foot rent rate. Evaluate the trade-off carefully: shared equipment access may make sense for early-stage companies, while those with more established protocols often find that owning dedicated equipment becomes more cost-effective over a multi-year lease term.

Frequently Asked Questions