The Monster Lab was made by Dr. Viktor in secret and so he only had certain resources to build it.

You can upgrade this Building by selecting it and clicking on upgrade.

Upgrading this Building is necessary to be able to Rank up your Monsters.

For example:

If you Monster Lab is only at level 4, your Monsters can only rank up to this level.

You would have to upgrade to level 5 if you would like to rank the Monster up further.