196 Citation Dr., in the GTA City of Vaughan is being converted to become a life sciences property. (Courtesy Colliers)

Life sciences space is hard to come by in the Greater Toronto Area (GTA), but a newly renovated 25,000-square-foot building is now available to lease in Vaughan.

The former manufacturing and warehousing building at 196 Citation Dr. is near the intersection of Langstaff Road and Dufferin Street, not far from major highways, the Toronto Transit Commission Vaughan Metropolitan Centre subway station, and dining, shopping and leisure amenities.

It has been retrofitted with about $10 million in specialized improvements since last year by its longtime private owner in order to become a 22,000-square-foot facility that meets European Union good manufacturing practice standards. It also includes 3,000 square feet of office space.

“This is a 25,000-square-foot, ready-to-go, brand new life science lab building in a market where there isn’t a single comparable,” Colliers senior vice-president Matthew Johnson, who’s leading the team marketing the property, told RENX.

Leasing interest is picking up

While the owner is looking to lease the property, Johnson said it could be made available for sale if the right offer comes along. There has been strong interest since the property started being marketed late last year, Johnson added.

Renovations have been ongoing during that time and are nearing completion. Johnson said it should be ready for occupancy on July 1.

“We’re coming out of the pandemic here and it’s been interesting in our market to watch the willingness and openness for groups to engage and go view the building,” Johnson said of marketing the property. “One of the realities of the marketplace that we’re talking about is many of the executives and decision-makers related to buildings of this nature are not in Canada.

“Over the past few months, we’ve had a bit of a build-up in demand for groups to cross the border, which is now happening. We have a group coming in from Germany in a couple of weeks. We had a group in from the U.S. a couple of weeks ago.

“Those are all groups that would have been here previously had it not been for border restrictions.”

Life sciences activity in the area

Johnson said there’s pharmaceutical and technology business activity in and around Vaughan. LEO Pharma, which employs 130 people, moved its Canadian office to Steeles Avenue East on Feb. 1. Apotex’s global head office is just south of Vaughan, as is Sanofi Canada’s large and growing campus.

The 196 Citation Dr. building is also in relatively close proximity to York University.

On a wider scale, the site fits in the Southern Ontario life sciences corridor that also includes Hamilton and Kitchener-Waterloo as well as the GTA — especially downtown Toronto’s Discovery District and “Pill Hill” in Mississauga’s Meadowvale area.

The corridor contains the largest life sciences community in Canada and one of the largest clusters of biotech, medtech, health tech and life sciences companies in North America.

According to Toronto Global, the city has more than 11,000 researchers and technicians working at 37 research institutes, nine teaching hospitals and the University of Toronto’s Faculty of Medicine.

Life sciences space is scarce

One of the reasons why life sciences space is so scarce in the GTA is that, at least until the pandemic, it had an extremely low office vacancy rate. Landlords didn’t feel obligated to build or retrofit more expensive specialized lab space if they knew they could easily lease to more traditional office tenants.

“Wet lab inventory in this market is ridiculously low, frankly, in comparison to major markets around the world,” said Johnson, who pointed out that Boston already has significantly more life sciences space than Toronto and has more under development.

There’s lots of talent available now, and more coming from universities and immigration, and venture capital funding from Canadian and American sources is on the rise. Government funding is also increasing in the life sciences sector. It’s just a matter of finding real estate for these people to work at and for the money to be invested in.

Toronto has about 15 million square feet of life sciences space, according to Johnson, and he said about 40 per cent of that is user-owned. User-owners represent 15 to 25 per cent of the market in large life sciences hubs like Boston and San Francisco, Johnson pointed out.

“They have more inventory, but also more of it available.”

New Toronto life sciences facilities coming

Sanofi and the federal and provincial governments announced in March 2021 that a $925-million investment would be made in a vaccination manufacturing facility at its North York site. The new facility is expected to create more than 1,200 jobs and be up and running in 2027.

The University of Toronto’s Schwartz Reisman Innovation Centre is under construction in the Discovery District. When completed it will provide a 12-storey, 250,000-square-foot building that will focus on artificial intelligence and innovation and a 20-storey, 500,000-square-foot tower that will provide space for biomedical innovation.

A KingSett Capital-owned, 20-storey, 1.22-million-square-foot building at 700 University Ave. in the Discovery District will add four storeys dedicated to high-performance life sciences research space that will encompass 187,000 square feet.

“There are a ton of groups, local and non-local, that are looking to invest, develop, retrofit or otherwise create space for wet lab use in the region right now,” said Johnson, who expects announcements to be made in the coming months.