The former North Broad Street hospital’s collapse and closure just before the pandemic prompted outcry from local and national elected officials and protests from staff and the surrounding community. Now part of the campus is now being revitalized as a hub for biotech research and development — and is even attracting new tenants from outside the region. Life sciences space specialist Race Street Labs took over management of one the buildings on the campus last December, and 1421 Race St. welcomed its first new tenant. The building’s current owner is Iron Stone Real Estate Investments. The venerable Philadelphia private equity firm bought it in 2021, along with several parts of the old Hahneman medical campus, according to Jason Friedland, Iron Stone director of operations and investments. The company is focused on the healthcare industry, he said, and was interested in creating more affordable lab space for companies that were just starting to grow. “Our hypothesis was, if we were able to do that,” Friedland Technical.ly, “then we would be able to attract tenants that were at a stage where they were growing and needed to move out of their shared lab space.” The building’s location was ideal, Friedland said, especially because of its proximity to Drexel University’s medical school and its labs, which are on the same block. Now, the top floor is occupied by Race Street’s first tenant: Zahav Biosciences. Zahav was previously Cytimmune Sciences, a Maryland-based drug development company focused on treating cancerous tumors. Last year, the company was purchased by Philly-based Brodie Generational Capital Partners (BGCP) and rebranded to Zahav, said Jacob Brodie, co-president of BGCP. BGCP moved the four-person biotech company here, choosing the central Race Street Labs location. “There was a lot of synergy and support that we felt we could get from vendors, for human resources,” Brodie told Technical.ly about the decision to be on. “As well, it was close and local. So we could visit regularly and oversee it.” A low-cost center for life sciences innovation A low-cost center for life sciences innovation
Hahnemann University Hospital was a teaching hospital for Drexel University’s School of Medicine that served many Philadelphia residents with lower incomes. It closed in September 2019, just a year and a half after American Academic Health System bought the hospital from Tenet Healthcare Corp. Philadelphia Academic Health System, the hospital’s owners, filed for Chapter 11 bankruptcy shortly after announcing Hahnemann’s closure. Race Street Labs realized the once-empty building was a potential home run for life sciences companies The firm targeted companies that wanted to be in the city but felt they could only afford the suburbs, according to Friedland, of Iron Stone Real Estate. Instead of charging $65 or more per square foot for rent, he said, Race Street Labs offers space for around $43 per square foot. Already outfitted with the bones of lab space and backup water and generator systems because of its former use as a hospital, the 120,000-square-foot building at the back of the former hospital campus underwent a full renovation, Friedland said. During the development process, Iron Stone interviewed life sciences companies from the region to learn what specific types of equipment, cabinetry, countertops and layout were ideal. The building can host 12 companies total, per Friedland, and now offers freight elevators, a loading dock, backup power, conference rooms, lounges, and shared meeting space. He added that management is willing to work with companies on customizations. “To the extent that there’s more demand, and we have someone who’s interested, we can already have the construction plans ready to go,” Friedland said. “If we have a tenant who wants to make alterations to the plans, we have complete flexibility to do so.” Sarah Huffman is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism. Join the conversation! Find news, events, jobs and people who share your interests on Technical.ly’s open community Slack
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