Breaking Down Wet Lab Costs for Biotechs in Ontario: Build vs. Rent?

How Much Does It Cost to Build a Wet Lab in Ontario?

Setting up a wet lab in Ontario, especially in the Greater Toronto Area (GTA), is an exciting step for emerging life sciences companies, but it comes with significant financial considerations. Toronto is home to a thriving biotech ecosystem, yet the cost of constructing a lab can be substantial. In this article, we explore the real costs of building wet lab facilities and whether renting or leveraging co-working spaces is the smarter choice for your company’s growth.

The Cost of Building a Wet Lab

Building a wet lab requires careful planning, with costs varying based on factors like size, customization, and infrastructure needs. According to CBRE's 2024 Life Sciences Construction Benchmarks & Trends report, the cost of laboratory conversions differs depending on the type of space:

• Base Building Conversions: $100 to $600 per square foot

• Interior Building Conversions:

  • Dry Lab/Office: $100 to $175 per square foot
  • Wet Lab: $250 to $350 per square foot
  • Chemistry Lab: $350 to $450 per square foot
  • Clean Room: $750 to $850 per square foot

It's important to note, however, the actual, final cost your company may have to undertake to build the exact facilities you need can vary a lot in Jones Lang LaSalle's (JLL) view, and it all depends on your particular needs. These estimates are just that, estimates, and a base point to start from. 

Are These Estimates Still Accurate?

Recent reports suggest that wet lab construction costs in Toronto have risen. According to CBRE's 2024 report, costs for specialty equipment have increased sharply from pre-pandemic levels, with some up as much as 30%-50%. Lead times for some equipment coming from overseas have increased from 10 to 20 additional weeks. These increases stem from rising material prices, labor shortages, and heightened demand for specialized lab spaces. Companies should work with industry experts to obtain the most up-to-date cost assessments.

A Real-World Example: Wet Lab Conversion Costs

For a 10,000-square-foot facility, where half the space is allocated for offices and the other half for wet labs, total construction costs could range from $5.6 million to $8 million—or $562.50 to $800 per square foot.

However, construction costs are just the beginning. Additional expenses include:

• Specialized Equipment: Instruments like centrifuges, spectrophotometers, and incubators add significant costs.
• Regulatory Compliance: Adhering to biosafety and environmental regulations increases complexity and expenses.
• Operational Costs: Ongoing expenses like maintenance, utilities, and upgrades contribute to long-term financial commitments.

The Hidden Costs of Customization

Beyond standard construction, lab customization can significantly impact the final price tag. Key considerations include:

• Custom Lab Furniture & Layouts: Tailored workbenches, storage solutions, and modular spaces add cost and complexity.
• Environmental Controls: Advanced HVAC systems, fume hoods, and biosafety cabinets are necessary but expensive.
• Utility Upgrades: Enhancing electrical, plumbing, and gas lines to support specialized equipment.
• Safety Features: Installing emergency showers, eyewash stations, and fire suppression systems to meet regulatory standards.
• Long-Term Maintenance: Maintaining and upgrading specialized lab infrastructure is an ongoing expense that also may include obtaining additional staff to perform routine equipment calibrations and preventative maintenance.

For many early-stage and scaling biotech companies, the financial risk of constructing a wet lab may outweigh the benefits.

Renting vs. Building: The Case for Co-Working Wet Labs

This is where coworking wet labs, like those at SPEC Labs, provide a valuable solution. These facilities offer fully equipped, professionally managed lab spaces, allowing biotech startups to focus on research without the financial and logistical challenges of construction.

Why Choose a Co-Working Wet Lab?

Opting for a coworking wet lab offers numerous advantages, including:

1. Faster Time to Market: Get immediate access to lab space instead of waiting 12-24 months for construction.
2. Scalability & Flexibility: Expand your space as needed without long-term lease commitments.
3. Cost Savings: Avoid massive upfront investment while still accessing premium lab infrastructure.
4. Collaborative Environment: Connect with like-minded biotech companies, mentors, and investors.
5. Operational Support: Benefit from shared administrative services, lab management, and compliance assistance.

Conclusion: Making a Smart Investment

For life sciences companies at the graduation stage, the decision to build vs. rent can significantly impact their ability to scale. While constructing a lab offers full control, the costs, risks, and long-term commitments can be prohibitive, but building a wet lab facility in Ontario presents a unique set of challenges and significant costs.

Taking residency in a coworking wet lab facility can offer a ready-made, pragmatic solution. For many companies, the ability to access fully-equipped spaces without the burden of construction or renovation expenses can be the key to rapid growth and success.

At SPEC Labs, we provide turnkey, co-working wet lab solutions to support the growth of life sciences ventures. Whether you need short-term flexibility or a scalable long-term solution, our facilities are designed to accelerate your success while reducing financial risk.

Connect With SPEC Labs

At SPEC Labs, we are committed to providing the resources and support needed to empower your venture. Explore the benefits of co-working wet labs and discover how we can help you accelerate your journey in Ontario's life sciences sector. Learn more about becoming a member and thrive.