Jeffrey Taub

Senior Technical Director, Business Development

AKRF

  • New Jersey Affiliate
  • SMPS-NY New Jersey Affiliate Leadership Committee & SMPS-NY Chapter Advisory Committee

On October 19, 2017, the New York and Philadelphia chapters of the Society for Marketing Professional Services co-hosted (in conjunction with IPS) a client panel on the current and future state of pharmaceutical real estate. Panelists included John Wilkinson, Executive Director of Global Real Estate Services for Merck & Co.; Thomas Kaufman, Associate Director of Corporate Real Estate for United Therapeutics; and Peter Gallagher, Vice President of Strategic Affairs for Teligent, Inc. The discussion was moderated by Alan Levy, Senior Program Manager for Mace North America.

Attracting and retaining top talent

Much of the discussion revolved around proximity to talent being an influential driver of real estate needs. Teligent, with headquarters in suburban southern New Jersey, is opening a lease in Iselin, according to Gallagher, to provide office space for professional talent in northern New Jersey. Telecommuting has increased at Teligent as a work/life balance strategy for its suburban employees. Wilkinson noted that Merck, too, will “follow talent and continue to invest in this region” due to the availability of local science, technology, and engineering professionals.

When it comes to proximity to talent, urbanization further informs the development of pharmaceutical real estate—and even employee benefits. Silver Spring is within sight of Washington, DC, but United Therapeutics is losing employees who want to be downtown rather than the suburbs, according to Kaufman, so the organization is willing to consider free or subsidized housing to keep professionals. Wilkinson noted the smaller footprint of urban real estate can be offset by employee amenities outside the footprint of the property, e.g., nearby shops and services in a walkable downtown.

Proximity alone is not enough to attract top talent, according to the panelists; facility design and amenities are a significant consideration for corporate real estate executives as well. Providing access to natural light for all employees is a key design principle at United Therapeutics, for example, where “our facilities are physical manifestations of our values,” according to Kaufman. Moreover, the company’s new headquarters in downtown Silver Spring will be net zero energy, says Kaufman, “which asks people to change their behavior so the building can achieve its goals” while promoting a more sustainable work environment for their employees. Staff-friendly amenities include activity and serenity floors as well as on-site day care and a fitness center.

Merck also “spends a lot of time talking about workplace design,” says Wilkinson. While looking to attract millennials, like most organizations, Wilkinson asks “how do we create an environment that doesn’t ostracize an older workforce just to get millennials?” The reality is there will always be multi-generational workplaces, and work environments must reflect this reality.

Providing design and construction services

When it comes to design and construction services, trust and familiarity are instrumental in working with all three pharmaceutical companies. “Does the company know our culture and understand our values,” asks Wilkinson. “There is value in partners who know our business.” It can be a challenge, however, to balance the desire for trusted partners with the need for local knowledge. Kaufman also noted the importance of working with a local engineering firm—particularly a firm familiar with the local land use attorney and approval board. “You do not want someone learning on your job.”

Promoting sustainability and energy efficiency

The panelists agreed their organizations design and build for sustainability and energy efficiency because it is the right thing to do—not to secure LEED credits or certification. There was even a case, shared by Kaufman, where designing for LEED Silver certification (per municipal regulations) would have been incompatible for FDA compliance. Despite pushback from local officials, United Therapeutics was able to secure the necessary variance.

Engaging local communities

Kaufman says United Therapeutics is “very sensitive to construction being disruptive to our community,” and the organization works hard to be a good member of the neighborhood. “Relationships with local officials have to be close,” added Wilkinson, especially where a company like Merck, with a large presence, can have a meaningful and positive impact on its neighbors through roadway and infrastructure improvements. Gallagher shared some intriguing community engagement strategies employed by Teligent, including tours of its manufacturing plant and hosting an outdoor community movie night by projecting the movie on the side of its building. “The small town really feels the benefit of what we are doing,” says Gallagher.

Overcoming regulatory hurdles 

When exploring new locations for real estate, Kaufman notes the “most efficient municipal entitlement process” can be a deciding factor, since “speed to market is key.” Indeed, on the topic of State aid in real estate transactions, Kaufman said United Therapeutics prefers to engage State officials in solving a particular challenge such as entitlements rather that focus on tax abatements and incentives. Gallagher added that States can be helpful (from a financial perspective) in keeping a business in-state when it threatens to leave, but there is not much of a role for State government when a business is simply looking to expand its existing operation.

Stay tuned for future client panels and other programs hosted by SMPS!