Phoenix’s Growing Life Science District Sets Its Eyes on National Prominence

Article originally posted on CoStar on March 8, 2019

The Phoenix Biomedical Campus includes Arizona State's Biomedical Sciences Partnership building opened in 2017. Illustration: Arizona State University

Phoenix officials say an almost two-decade effort to promote bioscience research is helping to catapult the city into a leading position among cities across the United States for life science and health care development.

While the city has work to do to catch up with the nation’s leading bioscience hubs of Boston, San Francisco and San Diego, downtown Phoenix’s nascent innovation district is getting so much development that it is poised to surpass more established, emerging cities by newly built square footage — and city officials say it’s only getting started.

Phoenix Community and Economic Development Director Christine Mackay said $3 billion in life science and health care projects totaling 4.2 million square feet are under construction or in the planning stages throughout the city planned for delivery over the next two years, with the potential to create more than 7,000 jobs.

“To put that in perspective, the city of Houston has only added 1.5 million square feet of health care and bioscience development, not including medical office buildings,” Mackay told CoStar News.

Developers’ optimism in the area’s potential was demonstrated this week by bioscience academic research developer Wexford Science and Technology, which broke ground Thursday on a $75 million research center anchored by Arizona State University in the latest expansion of the 30-acre Phoenix Biomedical Campus.

The seven-story, 225,000-square-foot office and laboratory building to be used for academic and commercial biomedical research is adding to the biomedical campus in the city’s PHX Core, a branded innovation district announced by the city last year which which now houses 1.5 million square feet of academic, research and clinical space anchored by Arizona State, the University of Arizona and Northern Arizona University. City officials predict the campus’ size will quadruple to 6 million square feet when fully developed.

The Wexford building under construction on seven acres north of Fillmore Street between Third and Sixth streets is scheduled to open in late 2020 and is among 10 new investments totaling $1.5 billion announced last month by Chicago-based health-care-focused real estate investment trust Ventas Inc., in a major ramp up of its partnership with Wexford Science.

Ventas, a publicly traded company with an estimated market value of $22.5 billion, owns 33 Wexford-managed properties around the country, including facilities anchored by Duke University, the University of Pennsylvania, Wake Forest, Arizona State and other prestigious academic research institutions.

Phoenix’s efforts to promote life science academic research as a way of diversifying the Arizona and local economy began in 2001 when the Flinn Foundation, a privately endowed philanthropic group established in 1965 by cardiologist Robert Flinn, funded a 25-year strategic plan called the Arizona Bioscience Roadmap.

“We’ve followed the road map like a bible and it’s paid dividends,” Mackay said. “Our biosciences growth outpaced the U.S. by 14 percent between 2009 and 2016. Seven years ago, you would not have recognized what was happening in Phoenix today.”

‘Linchpin of Revitalization’

Projects under way include the $648 million expansion of the famed Mayo Clinic co-developed with Arizona State in the Desert Ridge area of North Phoenix, the $500 million replacement of Maricopa Integrated Health System’s aging medical center at 24th and Roosevelt streets downtown, and Creighton University’s new $100 million medical school to be built in midtown’s Park Central district at the site of Phoenix’s first shopping mall.

The downtown Phoenix Biomedical Campus is the largest concentration of research facilities in the state, with buildings occupied by all three of Arizona’s top public universities. With an estimated $1.3 billion in local spending and other economic benefits, the campus has been a linchpin in the revitalization of downtown Phoenix, Mackay said.

Wexford’s mixed-use “knowledge communities” blend expertise from universities, academic medical centers and major research institutions with private-sector and corporate investment and experience, Thomas Osha, senior vice president of innovation of economic development for Wexford, told CoStar News.

A key part of Wexford’s success in Philadelphia; Winston-Salem, North Carolina; Baltimore, Maryland; and other cities with concentrations of bioscience research is building the facilities in vibrant downtown areas, Osha said.

“This Phoenix project compliments the Roosevelt Row Historic Arts District, one of the most interesting and vibrant districts in the country,” Osha said.

Osha said he anticipates that Wexford will develop an additional 1.5 million square feet at the Phoenix Bioscience Campus over the next several years, gradually migrating south toward the University of Arizona Cancer Center at Dignity Health, the University of Arizona College of Medicine and other major downtown facilities.

“We’ve been planning this project for almost two years,” Osha said. “Our approach is not to come in and just build a building, it’s to contribute to the development of a life sciences ecosystem. To do that, you need to really understand a university’s strategy and its areas of research excellence and investment, and understand the needs of the local biosciences entrepreneurial community.”