Philly life sciences slowdown leaves big lots empty — and residents awaiting a new grocery store

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A 200,000-square-foot lot on Market Street in Philadelphia is shovel-ready for University City’s next big life sciences development — and University City residents are ready for the proposed grocery store on the ground floor.

But economic challenges are leaving projects like this one on hold as developers struggle to secure tenants and financing. That means that the lot at 3838 Market St. — the site of Wexford Science & Technology’s next commercial development priority, after nearby One uCity Square — remains empty.

“The project’s ready to go,” said Pete Cramer, Wexford’s vice president of development. “We haven’t identified a tenant yet. The financing, the capital markets … there is money to be found.”

Sitting undeveloped three years after Wexford’s proposal cleared Philadelphia’s civic design review committee, the lot is indicative of the broader slowdown in dealmaking activity and tenant demand for lab and office space among biotechnology and life sciences companies in the city.

There were 21 deals in life sciences-related venture capital in Philadelphia in the first four months of 2025 — the lowest number of quarterly deals in at least a year — though total capital invested is up 25% year-over-year, according to Philadelphia-based real estate agency Savills. The sector is crunched for cash as it struggles to attract investors who favor less risky options amid high interest rates and federal policy uncertainty.

Compared to the flurry of enthusiasm a few years ago, there’s also a desire for cell and gene therapy companies to produce more positive data from their research before investors write “a big check,” Cramer added.

The stagnation in investor cash and factory demand is not only complicating developers’ plans. It’s also leaving residents uncertain about the future of their neighborhood, after their input on many of University City’s major life sciences projects has hinged on the potential retail and commercial benefits. The 3838 Market St. project received much of the necessary permitting back in 2022 and 2023 after earning the support of the registered community organizations in the area, including West Powelton Saunders Park Registered Community Organization.

Now, it’s become a waiting game.

“I don’t believe anybody is going to turn a piece of dirt” until Wexford secures an anchor tenant for the project, said the organization’s president, Pam Andrews. Cramer said the goal is for more than 50% of the building to be leased before shovels hit the ground.

“The concern would be what a glut of empty office space means to community vitality, but, I don’t think they’re going to build until they have some tenants,” said Debra McCarty, co-chair of the Powelton Village Civic Association’s zoning committee and a member of Wexford’s community advisory group.

The planned development at 3838 Market St. is a life sciences project, but its proposal also includes a retail component that hasn’t been part of other developments in the neighborhood: a grocery store. Wexford has received interest from a number of operators, Cramer said, adding that the winner would “likely” be a store that already has a footprint in Philadelphia.

The University City District, where the project is located, is already home to an ALDI, a Supremo, an Acme, a Grocery Outlet, a Mariposa Food Co-op and a GIANT Heirloom Market. However, Andrews noted the neighborhood is lacking an organic market, like a Sprouts or a MOM’s Organic Market. Sprouts has three locations in Philadelphia, plus one that will open June 13 in Northern Liberties. MOM’s has four locations in the Philadelphia metro region, including three in Pennsylvania and one in New Jersey.

Sprouts spokesperson Nicole Kaplan said she didn’t “have any details or information,” while MOM’s CEO Scott Nash said the brand had “no plans at this time” for more locations in Philadelphia.

Once Wexford finds an anchor tenant, or a business willing to take up a large chunk of the available space at 3838 Market, it will take 22 months to stand up the shell of the building, which will be constructed in two phases. The combined footprint would offer five floors of parking, over 500,000 square feet of lab and office space and 39,000 square feet of retail space on the ground floor.

While the project was originally planned as a life sciences-focused building, Cramer said Wexford has since marketed space to tenants interested in clinical uses, given the property’s proximity to hospitals like Penn Presbyterian Medical Center, which is building a new proton therapy center at 51 N. 39th St. Wexford has been funneling interest for larger clinical office space to 3838 Market, where it still has leeway to make custom adjustments, rather than other properties in the uCity Square district.

As Cramer and Wexford wait for that crucial anchor tenant, there are some brighter spots in the developer’s portfolio a few blocks further east on Market Street.

At One uCity Square, the crown jewel of Wexford’s University City innovation district, 96% of the building’s lab and office space is leased, with the building now home to multiple University of Pennsylvania labs, Century Therapeutics, Inc., Integral Molecular, Exponent, Dispatch Bio and Charles River Laboratories.

Meanwhile, Wexford has commitments for around one-third of the 12,000 square feet of retail space on the ground floor, and is in discussions with a potential operator for a restaurant in the southeast corner of the building.

On the ground floor of the University City Science Center at 36th and Market streets — another uCity Square location — Corio, an Italian-inspired restaurant and takeout counter offering pizza, upscale dining and a wine bar, is opening next to brewery Two Locals and Liberty Kitchen.

At the helm of the concept is David Feola, former executive chef of Ember & Ash in South Philadelphia, and two former general managers of Vernick Food & Drink, restaurant operator James Smith and CookNSolo’s Director of Operations Ryan Mulholland. The restaurant has applied for a liquor license and lists six open job positions with an expiration of May 15, though Corio spokesperson Marie DiFeliciantonio said the restaurant is waiting for inspections to be completed before announcing an opening date.

McCarty said the opening of Corio demonstrated that Wexford remains invested in building out “quality” retail offerings in the neighborhood, though she said she wished she saw more business at Two Locals. The Black-owned brewery opened in 2024 and offers beer, food and brewery tours.

To attract residents and workers to Two Locals and the rest of uCity Square, Wexford is looking at plans to expand its uCity Square Perks program, which offers discounts at local businesses and free access to LUCY, the SEPTA-operated, University City District-funded shuttle that loops through University City.

Andrews said her organization has been pleased with the outcome of their collaboration with Wexford, particularly with their vision for 38th and Market streets.

But she said that developers who invested in University City based on the surge in life sciences activity a few years ago were now being reminded of one major “bottom line.”

“You put the work in, and it still all boils down to the economics,” Andrews said.

The fear, she said, is that the right project could be built at the wrong moment, and have bad consequences.

“The community is left blighted — empty lots, empty lots, empty buildings,” she said.