Pittsburgh’s life sciences sector shows potential


The Assembly. Rendered courtesy of Wexford Science + Technology

Adapting at a rapid pace to meet changing business and user needs, the life sciences industry has emerged as one of the winners of the COVID-19 era. In Pittsburgh in particular, the sector has reached record levels of innovation over the past two years.

The once-industrial Pittsburgh Metro is undergoing major changes, with multiple historic structures being reimagined, strengthening and diversifying the region’s ecosystem with projects that support the life sciences sector.

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Drivers of change

Scott DiGuglielmo, director of agency brokerage at a local business Burns Scalo Real Estateidentified the key factors driving investment in life sciences in Pittsburgh: the talent that resides in local hospital systems and the research facilities that revolve around the area’s strong universities.

Private businesses and local universities are working together to build Pittsburgh’s next-generation economy. Last year, the city was named one of world’s best emerging startup ecosystems and one of the world’s top emerging ecosystems funded by the Startup Genome & Global Entrepreneurship Network. Additionally, a study by WalletHub named Pittsburgh one of the best US cities for STEM jobs.

Mark Thomas Pittsburgh Regional Alliance
Mark Thomas, President, Pittsburgh Regional Alliance. Image courtesy of Pittsburgh Regional Alliance

According to data provided by the Pittsburgh Regional Alliance, more than 925 startups have launched in the metro over the past 20 years. More recently, two of the region’s biggest tech companies — Duolingo and self-driving vehicle company Aurora Innovation — went public, reflecting the success of Pittsburgh’s startup community. Today, examples of notable companies taking off and establishing a foothold in the Pittsburgh area include Apollo Neuroscience, Stronghold Digital Mining, Viral Moment, and Mach9 Robotics, among others.

Two major hospital systems — and some of the region’s largest employers — are headquartered in the city and have consistently invested in the metro over the past few years. Allegheny Health Network has raised over $1 billion in hospital expansions and launched the AlphaLab Health accelerator in 2020 with seed investor Innovation Works. University of Pittsburgh Medical Center has invested more than $2 billion in three new specialty hospitals and plans to invest an additional $1 billion between 2020 and 2024 to bring new drugs, diagnostics and devices to market.

“Companies are tech heavy and deep, while organizations create products for their division lines and seek out new innovations…Although Pittsburgh is not huge, but a niche market, it is efficient and good in these areas,” Mark Thomas, president of the Pittsburgh Regional Alliance, said commercial real estate director.

Growth: a public-private affair

There are several public-private initiatives designed to help accommodate the growth of the sector in the region. These vary on a case-by-case basis, depending on the company, the type and scale of the investment, or the neighborhood where those investments are taking place, Thomas explained.

One of the most popular initiatives is the Keystone Innovation Zone tax credit program. The incentive provides tax credits to companies under eight years old operating in specific targeted industries within the limits of a Keystone Innovation Zone. The program encompasses a total pool of up to $15 million in tax credits available each year to these businesses.

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But the public sector can also collaborate in other ways with the private sector. Burns Scalo used Pennsylvania Neighborhood Assistance Enterprise Zone tax credits and Redevelopment Assistance Capital Program funds to purchase the site for his next project, The Riviera. The Urban Redevelopment Authority has remedied brownfield conditions on what was once a steelworks.

“We continue to work with the public sector to identify funding opportunities and it appears the public sector is very motivated to support Pittsburgh’s life sciences sector in the future,” DiGuglielmo said.

The best projects that are reshaping Pittsburgh

Burns Scalo is just one of many developers who share the same vision for Pittsburgh’s future as a premier life science center. The company’s 160,200 square foot Riviera project will be the first and only luxury life sciences facility in Pittsburgh.

Located in the Oakland neighborhood within the Pittsburgh Technology Center and Innovation District, The Riviera rises near tech incubators, medical drivers, and life science centers. The project also benefits from a connection to nearby Carnegie Mellon University and the University of Pittsburgh, and will include an array of housing options and amenities.

riviera burns scalo real estate pittsburgh life sciences
The Riviera. Image courtesy of Burns Scalo Real Estate

“This experiential and luxurious life sciences building is something new to the Pittsburgh market. It has been successful in major life science markets such as Cambridge, Mass., and San Francisco. We borrowed a chapter from the handbook of multi-family hospitality and luxury when designing the Riviera,” said DiGuglielmo.

The Riviera is expected to include a full-service cafe, private fitness center, co-working spaces, conference center, on-site parking, bike-share stations, and a large riverside patio. Service amenities, such as dry cleaning, organized educational programs, and an on-site concierge will also be available.

“The Riviera was developed on a 100% speculative basis and, as most people know, there are substantial costs to creating such a life science and wet lab facility. Additionally, the development of the Riviera during a pandemic also resulted in unforeseen labor and material costs, both of which significantly impacted the timing and schedule of the project,” added DiGuglielmo.

the pittsburgh life sciences assembly
Historic photo of the former Ford Motor Co., currently being converted to The Assembly. Image courtesy of Pittsburgh Regional Alliance

Other representative projects in Pittsburgh include the conversion of the Ford Motor Co. assembly plant built in 1915 into a $330 million center for collaboration, innovation and commercialization, focused on cancer research. and bioscience discovery.

Developed by the Baltimore-based company Wexford Science + Technology, the 355,000 square foot Assembly is one of Pittsburgh’s largest adaptive reuse projects. When completed in the second quarter of this year, the project is expected to bring together researchers from Pitt and UPMC, private companies, as well as entrepreneurs, and serve as a critical focal point for Pittsburgh’s life sciences ecosystem. .

A nearly empty suburban Pittsburgh hospital that came to a standstill 10 years ago is also being reimagined as a place where new biotech, therapeutics, pharmaceutical and medical device companies can grow. Part of AGH’s suburban campus is being renovated to house AlphaLab Health, a new accelerator that supports early-stage startups in their efforts to bring innovations to market.

All of these projects, and many more, will continue to meet the continued demand for space for life sciences, create new jobs, and ultimately diversify the region’s economy. Companies want to maximize their resources and consider the public domain as a true partner.

Space needs in the life sciences sector are quite unique, so public organizations must work with developers to ensure they provide the necessary space and facilities that will ultimately turn Pittsburgh into a rival of the major markets of the same field in the country, Thomas concluded.


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