Life Sciences Commercial Real Estate Leases: Unique Industry Considerations; Negotiation and Drafting Strategies

This CLE webinar will examine key considerations when negotiating and drafting commercial real estate leases for life sciences companies. The panel will discuss the specialized needs of life sciences tenants requiring bespoke agreements—such as long lease terms, complicated and customized buildouts, and environmental concerns—and offer drafting and negotiation strategies for landlord and tenant counsel.

Commercial real estate leases involving life sciences companies differ significantly from more traditional types of commercial leases given the specialized business needs of the companies. Boilerplate lease provisions will not adequately protect the parties. Therefore, counsel for tenants and landlords should understand key areas requiring more in-depth negotiation and best practices for drafting bespoke life sciences commercial real estate lease agreements.

Lease provisions that may require additional negotiation include: 

1. Length of term, renewal, and assignment. These leases are often lengthy (10+ years) because fitting out a property can be costly, and tenants may want to justify the cost by ensuring certainty of occupation. On the other hand, the risk of failure can be high in the life sciences industry, and with such a lengthy term, the parties must carefully negotiate assignment and subletting provisions.
2. Specialized buildouts and improvements. The real property needs of life sciences tenants are complex and require specialization (e.g., cold rooms, wet and dry labs, customized climate control and ventilation systems). Negotiations may center on who is paying for what capital improvements and how much; who has oversight of the project; and what happens at the end of the lease when the landlord wants to re-lease the space without the specialized improvements.
3. Environmental concerns and permitted uses. The business of life sciences tenants often brings an increased risk of environmental contamination. Therefore, the parties may negotiate, among other things, environmental inspection and reporting at the beginning and end of the term and focus on permitted use provisions that may limit what the tenant can do with what materials on the property. 

Listen as our expert panel examines requirements for life sciences commercial real estate leases. The panel will discuss key provisions unique to the industry and offer negotiation and drafting strategies for landlords and tenants.