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With Penn and the Children’s Hospital of Philadelphia located in University City, the local area has experienced an increasing demand for lab spaces from the life science industry. Credit: Serena Jankovic

Chicago and New York developers recently announced a plan to acquire land at the intersection of 38th and Chestnut streets — making way for a high-tech office and lab building.

Sterling Bay and Harrison Street, both Chicago-based companies, and the New York-based Botanic Properties firm have formed a joint venture to purchase the site. The 13-floor, 310,000-square-foot high-rise office building is set for construction from early 2023 to 2025.

This announcement comes amid increasing demands for expanded lab space from companies in the life science industries, The Philadelphia Inquirer reported. University City has become a hub for life science, especially as a result of local institutions such as Penn and the Children’s Hospital of Philadelphia.

Other projects in University City include the West Tower of the Schuylkill Yards with 200,000 square feet of commercial space including labs, One uCity Square at 37th and Warren streets with 400,000 square feet, and a 500,000-square-foot laboratory on 30th and Chestnut by gene therapy company Spark Therapeutics.

Venture investment in the life science sector almost tripled in Philadelphia over the last 20 years, from $430 million in 2000 to $1.5 billion in 2021, according to the Inquirer.

Additionally, about 1.3 million square feet of office space with predicted completion in the next year, are primarily intended for life science companies, a 28% increase from current inventory, according to a report from real estate services firm Newmark.

38th and Chestnut had previously been the center of several talks for acquisition — property owner Ted Pagano told The Daily Pennsylvanian in 2018 that he had participated in several conversations with parties interested in buying the property.

The 3800 block on Chestnut Street is home to many businesses familiar to Penn students — including Abner’s, one of Philadelphia’s most popular cheesesteak restaurants; Koreana, a traditional Korean restaurant; Sitar, an Indian buffet restaurant; and Furniture Campus Home Store, a popular site to buy dorm supplies.