2022 March Life Sciences Update
Animated publication
2022 MARCH
Life Sciences Update North American Report
Contents
Summary
Summary
02
Funding Remains Strong
03
The life sciences industry has been on the rise over the past half-decade thanks to a surge in new products and technology, as well as an influx of capital from both public and private investors. The last two years, in particular, have seen tremendous growth with $70 billion of private equity (PE) capital and public National Institutes of Health (NIH) funding pouring into life sciences-related companies in North America in 2020 and a record $78 billion in 2021. Building off the momentum of last year’s successful implementation of the mRNA technology, opening the door to new treatments for diseases like cystic fibrosis, cancer and HIV, the industry is poised for another successful year in 2022.
This 2022 Q1 U.S. Life Sciences Update breaks down the current trends in the life sciences industry at a high level by exploring: 1. Where the capital is flowing; 2. Where the talent can be found; and 3. The impact on the lab space market (i.e., demand, cost and new construction). The report also contains a market-by market analysis that provides detailed overviews of some of the largest life sciences markets in the U.S.
Talent is on the Rise
07
Sector Growth = Increased Demand for Lab Space Market-by-Market Analysis
09
12
Boston
13
New Jersey
14
New York City
15
Philadelphia
16
Raleigh / Durham
17
San Diego
18
San Francisco Bay Area
19
Suburban Maryland (I-270 Corridor)
20
Appendix
21
2 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Even though NIH funding declined for the first time since 2014, 2021 funding—$33.5 billion— still outpaced pre-pandemic levels by 7.8%. It continues to be weighted towards the largest markets, with the top 10 markets accounting for half of all U.S. funding. In addition, PE funding increased by 29%, exceeding $44 billion, and PE and public offering investment in life sciences companies has been just over $86 billion since the pandemic began. Funding Remains Strong
3 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Funding Remains Strong
Top Markets in NIH Funding for the Previous Five Years (2017-2021)
Boston
$14.2B
New York City
NIH Funding Down in 2021 by 4.1% Total Annual U.S. NIH Funding over Time
Half of NIH Funding Goes to 10 Markets Share of Annual NIH Funding in Top 10 Markets
$11.3B
San Francisco Bay Area Baltimore / Suburban MD (I-270)
$9.0B
$40
NIH Funding - U.S.
$20
52%
$35.0
$35
$8.5B
$16
50%
Raleigh / Durham
$30
$33.5
$7.3B
$25
$12
48%
Seattle
$5.9B
$20
Billions
Los Angeles
$8
46%
Billions
$15
$5.8B
Average Annual Growth Rate 1995-2021: +5.5% 2016-2021: +6.2%
Philadelphia
$4
44%
$10
$5.5B
$5
San Diego
$0
42%
$4.9B
$0
Chicago
Funding in Top 10 Markets
Share of U.S. Funding (rhs)
$4.4B
Houston
Source: U.S. National Institutes of Health, Cushman & Wakefield Research
Source: U.S. National Institutes of Health, Cushman & Wakefield Research
$3.7B
Pittsburgh
$3.2B
Even though total U.S. NIH funding declined by 4.1% YoY in 2021, it was the second highest year on record (7.8% above 2019). In fact, even with the decline, the growth in funding over the past five years has averaged +6.2% per year, which is faster than the 26 year average dating back to 1995 (+5.5%). The downward trend is likely attributed to a one-year blip—the NIH’s 2022 budget request included an increase of $9 billion in total program spending, of which over 80% is “awarded for extramural research.”
Half of NIH funding in the U.S. is allocated to the top 10 markets led by Boston, New York City and the San Francisco Bay Area. Over the past five years, the NIH distributed $76.8 billion to organizations located in just 10 U.S. markets. These are also the cities with the fastest growing life sciences labor pools and the most dynamic lab real estate markets.
Ann Arbor
$3.0B
St. Louis
$2.8B
Atlanta
$2.6B
Source: U.S. National Institutes of Health, Cushman & Wakefield Research
4 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Funding Remains Strong
Investment in Biotech up 12.7% YoY North American Venture & Public Offering Capital
30 Largest Transactions Over the Past Two Years Life Sciences VC & Public Capital Invested in 2020 & 2021
Private Equity (PE)
Public Offerings
Company Name Royalty Pharma
Size (MM)
Date
Type
C&W Market New York City Wilmington, NC
$45
1
$2,180 $1,863 $1,620 $1,338 $755 $668 $588 $570 $551 $548 $525 $525 $506 $500 $500 $500 $493 $483 $451 $436 $424 $420 $400 $390 $368 $350 $340 $336 $330 $325
Jun 2020 Feb 2020 Nov 2020 May 2020 Oct 2020 Dec 2020 Feb 2021 Jan 2021 May 2020 Jun 2020 Mar 2021 May 2020 Sep 2020 Jun 2020 May 2020 May 2020 Mar 2020 Dec 2020 Oct 2020 Apr 2021 Jun 2020 Apr 2020 Jul 2020 May 2020 Mar 2021 Jul 2020 Sep 2020 Apr 2021 Aug 2020 Jan 2020
Public Public Public Public
2 3 4 5 6 7 8 9
Pharmaceutical Product Development
$40
Maravai Life Sciences Moderna Therapeutics
San Diego
Boston
$35
Resilience
VC
San Diego New Jersey
$30
Certara
Public Public
Sana Biotechnology
Seattle Boston
$25
EQRx
VC
MyoKardia
Public Public
SF Bay Area New Jersey
$20
Billions
10
Catalent
11
ElevateBio
VC
Boston
$15
12 13 14 15 16 17 18 19
Iovance Biotherapeutics
Public Public
SF Bay Area SF Bay Area
$10
10x Genomics
Indigo Agriculture
VC
Boston Boston Boston
$5
Insulet
Public Public
Bluebird Bio
$0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Lyell
VC
SF Bay Area Vancouver New York City Salt Lake City
AbCellera
Public Public Public Public Public Public
Source: PitchBook
Everest Medicines
20
Recursion
21
Legend Biotech Immunomedics
New Jersey New Jersey
22 23 24 25 26 27 28 29 30
Unsurprisingly, biotechnology investment exploded during the pandemic with biotechnology PE and public offering investment in North America exceeding $45.7 billion in 2021. Between 2020 and 2021, $86.3 billion was invested ($78.8 billion in PE and $7.5 billion in public offerings), which exceeded the combined four-year total between 2016 and 2019 ($82.3 billion). The largest deal in 2021 was Seattle-headquartered Sana Biotechnology’s IPO that raised $588 million. The next two largest deals—and half of the top 10 deals— were for companies headquartered in Boston.
Relay Therapeutics
Boston
GRAIL
VC
SF Bay Area
Instil Bio Zymergen
Public
Dallas
VC VC VC
SF Bay Area SF Bay Area
RBNC Therapeutics Adagio Therapeutics
Boston
Schrödinger
Public Public
New York City
Blueprint Medicines
Boston
Source: PitchBook
5 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Funding Remains Strong
Life Sciences Investment by Region In 2021, the top markets for life sciences VC investment remained the same as the previous year: Boston, San Francisco Bay Area, San Diego and New York City—accounting for $41.3 billion in 2021. There were 29 completed deals for at least $250 billion, of which 20 were VC funding rounds and nine were IPOs. Three-fourths of those large deals occurred in just four markets: Boston (11), San Francisco (7), San Diego (3) and New York City (2).
Life Sciences VC & Public Capital Invested by Region, 2021
$6.6B San Diego
$3.1B New York City
$52.4B Total
$1.4B Washington DC Metro
$18.0B Boston
$2.1B Seattle
$0.8B Salt Lake City
$0.9B New Jersey
$0.2B Montreal
$0.7B Toronto
$1.5B Philadelphia
$0.7B Denver
$13.6B San Francisco Bay Area
$0.4B Vancouver
$0.8B Chicago
$1.1B Los Angeles
$0.5B Raleigh / Durham
Source: PitchBook
6 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Talent is on the Rise
Life sciences employment has continued to fare better than the U.S. job market with YoY growth up 7.9% and 11.4% in 2020 and 2021, respectively. Since 2011, total U.S. employment growth has averaged 1.0% per year while life sciences employment has increased by 6.6% per year, on average. The top 10 life sciences MSAs account for 45% of the U.S. life sciences talent pool led by Boston, NYC-NJ, San Francisco, Philadelphia and San Diego.
7 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Talent is on the Rise
Markets with the Largest Talent Pool Life Sciences Total Employment and Labor Pool by Market (MSA), 2021
Life Sciences Job Growth Accelerated in 2021 Second Largest YoY Growth (+11.4%) in past 30 Years, Behind only 2018
Sacramento Indianapolis St. Louis
San Diego DC Metro Los Angeles Seattle Chicago Raleigh-Durham Houston Baltimore Minneapolis Dallas Portland, OR Salt Lake City Madison, WI Miami Pittsburgh Detroit Atlanta Denver
Employment: R&D in Biotechnology Industry
Employment Growth by Decade (Average Annual)
Total Employment (U.S.)
Life Sciences (U.S.)
300
7%
6.6%
275
267
6%
250
5%
225
4%
200
Boston San Francisco Bay Area New York City-New Jersey Philadelphia
Thousands
175
3%
0 10 20 30 40 50 60 70 80 90
150
2.0%
2%
Thousands
1.7%
Source: Emsi
125
1.0%
1%
0.5%
100
0.0%
0%
The top 10 markets account for 45% of the U.S. life sciences talent pool (including current employment and labor pool). This percentage is up from 42% over the past five years, illustrating that job growth continues to be concentrated in these top markets. Labor pool growth in the top 10 markets is up 19% since 2016 and the next tier of markets (#11-20) have increased a similar amount over the past five years (+16%). After that, however, growth is anemic with all other markets accounting for just 3.3% growth since 2016. Major life sciences hubs will continue to be drivers of life science and lab real estate with employment and funding trends also boding well for real estate growth in emerging markets around the country.
1991-2001
2001-2011
2011-2021
Source: U.S. Bureau of Labor Statistics
Source: U.S. Bureau of Labor Statistics, Cushman & Wakefield Research
Unlike the broader economy, life sciences employment did not falter during the pandemic. Instead, there was only one month of job losses (April 2020 declined by 0.1%) and year-end job growth was up 7.9% YoY in 2020 and 11.4% in 2021.
8 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Sector Growth = Increased Demand for Lab Space
Growth in the life sciences sector has directly translated into increased demand for lab space across major markets. Coupled with strong capital flows, life sciences companies have increased their footprint in most markets, driving up rents and increasing occupancies. This uptick has attracted more jobs and more talent to the sector as evidenced by the growth of employment. Investors are trying to keep up with this demand in 10 key U.S. markets with the current robust construction pipeline totaling 17.1 million square feet (msf).
9 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Sector Growth = Increased Demand for Lab Space
Correlation between Talent & Lab Space Life Sciences Inventory & Employment Pool, Select U.S. Markets
Growth in Life Sciences Markets Under Construction Space & Projected Growth in Labor Pool
Lab Space: Current Inventory & Under Construction
Projected Growth in Labor Pool & Lab Inventory
50
Current Inventory Under Construction U/C as % of Inventory
16%
San Francisco Bay Area
45
SF Bay Area
50%
60
New York City
14%
40
50
40%
12%
Boston
35
Raleigh-Durham
40
10%
30
30%
San Diego
Seattle
30
Suburban MD
8%
Boston
25
MSF
20%
Suburban MD
20
San Diego
20
6%
Philadelphia
10%
New Jersey
10
15
Raleigh/Durham Life Sciences Inventory (MSF)
New Jersey
4%
Philadelphia
10
0%
0
Chicago Forecasted Labor Growth (2021-2025) 2%
Los Angeles
Denver
Seattle
5
Chicago
0%
New York City
0%
10%
20%
30%
40%
0
0
20
40
60
80
100
Under Construction as % of Current Inventory
Employment Pool (Thousands)
Source: Emsi, Cushman & Wakefield Research
Source: Cushman & Wakefield Research
Source: Esmi, Cushman & Wakefield Research
There is, of course, a correlation between the depth of the employment pool and the life sciences inventory in each market. Across these 12 markets, the average inventory-to-talent ratio is 462 sf. Several Western markets—as well as Raleigh-Durham—have higher ratios above 600 sf: San Francisco Bay Area, San Diego and Denver. Chicago is the only market with a ratio below 250 sf per potential worker. Boston has the largest labor pool and its inventory is scheduled to grow the most with over 9.6 msf of lab space currently under construction.
The 10 featured U.S. life sciences markets currently have 17.1 msf of lab space under construction. This represents 10.7% of current inventory. Currently, Boston (9.6 msf), San Francisco Bay Area (2.9 msf) and San Diego (2.3 msf) have the most construction in the pipeline. Although starting from a lower basis, double-digit increases in inventory are coming for New York City (26%), Chicago (14%) and Philadelphia (10%). New lab space is needed, especially in tight markets with sub-6% vacancy rates (e.g., San Diego, Philadelphia and Boston).
10 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Sector Growth = Increased Demand for Lab Space
Lab Space Fundamentals Select U.S. Markets
Lab Share as % of Office Inventory Select U.S. Markets
Life Sciences: Current Rent & 6-Year Growth
Life Sciences: Vacancy Rate, Q4 2021
25%
Rent
Rent Change 2015-2021 (right hand side)
Seattle Boston Los Angeles Suburban Maryland
120%
$120
20%
100%
$100
80%
$80
New York City Denver Chicago Raleigh/Durham New Jersery San Francisco Bay Area San Diego Philadelphia
60%
$60
15%
40%
$40
20%
$20
10%
0%
$0
5%
0% 5% 10% 15% 20% 25% 30% 35%
*Philadelphia rent change is from 2017 to 2021
0%
Source: Cushman & Wakefield Research
Since 2015, lab space asking rents have increased by an average of 72%, led by rates that more than doubled over that time in the San Francisco Bay Area and Raleigh-Durham. The life sciences market is tight with vacancy below 10% in six of the largest U.S. markets: San Diego, Philadelphia, Suburban MD, Seattle, Boston, and Los Angeles. And even with a large pipeline of new space, strong pre-leasing along with forecasted sector and employment growth, will keep vacancy rates low in most major markets.
Source: Cushman & Wakefield Research
11 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Market-by-Market Analysis
12 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Boston
Market Summary • Greater Boston has become an increasingly dominant center of the life sciences industry, with a continued regular international audience as well as an influx of scientists looking to contribute to the growing environment. • Nearly 15 msf of lab product is either under construction or in pre construction phases as the total inventory of lab product is likely to exceed 40 msf by 2025. • A lack of readily available developable land in Kendall Square, the biotechnology industry center, has led to the formation of new industry area hotspots, including Somerville’s Union Square, Boston’s Seaport District and numerous areas within Watertown. • Following a decrease in direct flights in 2020, daily direct air service to four continents has resumed from Boston Logan International Airport, an important connection for the highly collaborative life sciences industry. • Housing has emerged as a critical feature in complementing bio growth. In some cases, future occupants of under construction lab buildings have reserved units in nearby, under construction multifamily assets with planned delivery dates close to tenant occupancy.
Public & Private Funding (2021)
Rent vs. Vacancy Comparison
Fast Lab Stats 25.1 MSF Market Square Footage $87.93 $ Per SF 2.5% Vacancy 87.4K Total Life Sciences Employment & Talent Pool 239% Life Sciences Employment Growth Rate Since 2001
Company
Deal Type
Completed Type
$ Raised (MM)
$20 $30 $40 $50 $60 $70 $80 $90 $100
7%
EQRx
Early Stage
Jan 2021
VC
$570.0
6%
ElevateBio
Later Stage
Mar 2021
VC
$525.0
5%
Neumora
Early Stage
Oct 2021
VC
$400.0
Vacancy Rate
4%
XtalPi
Later Stage
Aug 2021
VC
$400.0
3%
Generate Biomedicines
Later Stage
Nov 2021
VC
$370.0
Adagio Therapeutics
Later Stage
Apr 2021
VC
$335.5
2%
Adagio Therapeutics
IPO
Aug 2021
Public
$309.4
1%
Average Asking Rent $/sf
$0 $10
Cardurion Pharma
Early Stage
Oct 2021
VC
$300.0
0%
Valo
Early Stage
Mar 2021
VC
$300.0
2015 2016 2017 2018 2019 2020 2021
Verve Therapeutics
IPO
Jun 2021
Public
$266.7
Asking Rents
Vacancy Rate
Representative Investment Sale Transactions (2021)
Address
Type
$ MM
RBA SF Date
Buyer
401 Park Dr, Boston
Office (will convert to Lab)
$944.2
973,145 Jan 2021
Alexandria Real Estate Equities
201 Brookline Ave, Boston
Lab
$539.0
510,116 Jan 2021
Alexandria Real Estate Equities
101 South St, Somerville
Lab
$478.3
289,000 Dec 2021
TPG Capital
Representative Life Sciences Companies
Life Sciences Talent Pool
135 Morrissey Blvd, Boston
Active Lab Conversion
$362.5
693,921 Aug 2021
Beacon Capital Partners
Talent pool includes life science professionals not currently employed in the life science sector
Company
Type
470 Atlantic Ave, Boston
Office (will convert to Lab)
$238.0
346,225 Dec 2021
Nan Fung Life Sciences
Biogen
HQ
36,426
2 Financial Ctr, Boston
Office (will convert to Lab)
$210.0
220,000 Aug 2021
Nan Fung Life Sciences
38,000
321 Harrison Ave, Boston
Active Lab Conversion
$154.3
233,901 Apr 2021
Biomed Realty Trust
bluebird bio
HQ
34,000
1 Canal Pk, Cambridge
Office (will convert to Lab)
$131.0
112,000 Jul 2021
Breakthrough Properties
Bristol Myers Squibb Regional HQ
550 Arsenal St, Watertown
Mall (will convert to Lab)
$130.0
260,867 Apr 2021
Alexandria Real Estate Equities
30,000
CRISPR Therapeutics
HQ
93 Worcester St, Wellesley
Office (will convert to Lab)
$111.5
270,000 Sep 2021
Beacon Capital Partners
Moderna Therapeutics HQ
26,000
Novartis
Regional HQ
Representative Lease Transactions (2021)
Average Annual Growth Rate 2001-2021: 3.5%
22,000 Number of Persons
Pfizer
Regional HQ
Company
Address
Size (SF)
New/Renewal
Type
Quarter
Landlord
18,000
Sanofi
Regional HQ
Prime Medicine
60 First St
124,000
New
Lab
Q4
Anchor Line
Tscan Therapeutics
880 Winter St
113,487
New
Lab
Q4
Boston Properties
Takeda Pharmaceuticals Regional HQ
2011
2017
2021
2012
2015
2013
2018
2019
2016
2014
2010
2001
2007
2020
2002
2005
2003
2008
2009
2006
2004
Kymera Therapeutics
AOTC 1
100,624
New
Lab
Q1
Alexandria Real Estate Equities
Vertex Pharmaceuticals HQ
Avencell
500 Forge St
55,776
New
Lab
Q1
Boylston Properties
Bio Degree-Awarding Institutions, Metro Area • Boston University • Fitchburg State University • Harvard University • MIT • Mount Wachusett Community College • Salem State University • Tufts University • University of Massachusetts Lowell
Curie Therapeutics
100 Forge St
40,000
New
Lab
Q4
Boylston Properties
Top NIH-Funded Institutions (2017-2021) $2.5B Massachusetts General Hospital $1.8B Brigham and Women’s Hospital $972M Harvard Medical School
RVAC Medicines
880 Winter St
37,202
New
Lab
Q4
Boston Properties
Biocytogen
300 Third St
35,000
New
Lab
Q4
Boston Properties
Alchemlab
1050 Winter St
25,000
New
Lab
Q4
Greatland Realty Partners
Abata Therapeutics
100 Forge St
23,600
New
Lab
Q4
Boylston Properties
Research Contributor Brendan Carroll brendan.carroll1@cushwake.com
Sources: Cushman & Wakefield Research, CoStar, National Institutes of Health (NIH), Emsi, Pitchbook
13 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
New Jersey
Market Summary • Life sciences companies continued to call New Jersey their home in 2021, a trend which has not waivered for quite some time. The highly-educated talent pool continues to motivate companies to expand within the state, along with an innovative ecosystem with top-rated research universities and a persistent pipeline of biotech start-ups. • As a cheaper alternative to some high-priced lab markets, the Garden State has recorded a rise in lab and R&D demand over recent years. • With the market tightening amid healthy activity, asking rents for life sciences space has risen markedly over the last two years. Compared to 2020, the average net asking rental rate has swelled by 12.2% to an all time high of $33.61 psf. • Investors remain extremely interested in purchasing life sciences facilities throughout the Garden State, especially fully leased assets. Institutional buyers such as Thor Equities, Harrison Street, and Lincoln Equities Group have all entered the life sciences marketplace in recent years.
Public & Private Funding (2021)
Rent vs. Vacancy Comparison
Fast Lab Stats 14.2 MSF Market Square Footage $33.61 $ Per SF 11.8% Vacancy 43.7K Total Life Sciences Employment & Talent Pool 141% Life Sciences Employment Growth Rate Since 2001
Company
Deal Type
Completed Type
$ Raised (MM)
$40
16%
Elusys
Grant
Dec 2021
VC
$350.0
$35
14%
Edda Technology
Later Stage VC Apr 2021
VC
$150.0
$30
12%
Modern Meadow
Later Stage VC Apr 2021
VC
$130.0
$25
10%
Vacancy Rate
Elucida Oncology
Later Stage VC Jan 2021
VC
$43.7
$20
8%
Claris Biotherapeutics
Early Stage VC Jul 2021
VC
$38.5
$15
6%
Flowonix
Later Stage VC Jan 2021
VC
$36.5
$10
4%
Starton Therapeutics
Early Stage VC Nov 2021
VC
$25.0
$5
2%
Average Asking Rent $/sf
Onkos Surgical
Later Stage VC Nov 2021
VC
$22.5
$0
0%
2015 2016 2017 2018 2019 2020 2021
Nuvectis Pharma
Early Stage VC Aug 2021
VC
$15.0
Neumentum
Early Stage VC Oct 2021
VC
$13.3
Asking Rents
Vacancy Rate
Representative Investment Sale Transactions (2021)
Address
Type
$ MM
RBA SF Date
Buyer
Representative Life Sciences Companies
170 Park Ave
Office
$47.0
147,125 Feb 2021
JLL Income Property Trust
86-90 Morris Ave
Office/Lab
$39.7
620,627 May 2021
Onyx Equities
Company
Type
Life Sciences Talent Pool
111 Ideation Way
High Tech/Flex/Lab
$36.8
163,990 Dec 2020
Harrison Street
Bristol Myers Squibb HQ, Research Facility
Talent pool includes life science professionals not currently employed in the life science sector
Johnson & Johnson HQ, Research Facility
Merck
HQ, Research Facility
Representative Lease Transactions (2021)
38,000
Bayer
HQ, Research Facility
Company
Address
Size (SF)
New/Renewal
Type
Quarter
Landlord
Regional Office, Research Facility Regional Office, Research Facility Regional Office, Research Facility
Pfizer
Wuxi Biologics
1 Cedar Brook Dr
90,000
New Lease
Office/Lab Q1
Eastern Properties
34,000
PMV Pharmaceuticals
1 Research Way
50,000
New Lease
Lab/R&D Q1
BioMed Realty Trust
Sanofi
HIKMA Pharmaceuticals
33 Technology Dr
49,539
New Lease
Office/Lab Q3
Atlantic Development
30,000
Novartis
26,783
CytoSorbents Corporation
305 College Rd E
48,511
New Lease
Office/Lab Q2
National Business Parks
NJ Biopharmaceuticals LLC
350 Carter Rd - Bldg 5
47,197
Expansion
Lab/R&D Q4
Equus Capital Partners
Novo Nordisk
Regional Office
26,000
NJ Biopharmaceuticals LLC
350 Carter Rd - Bldg 5
35,000
New Lease
Lab/R&D Q2
Equus Capital Partners
Teva Pharmaceuticals Ferring Pharmaceuticals
Regional Office, Research Facility
Number of Persons
Ascendia Phamaceuticals
661 Route 1 S
32,341
Expansion, Sublease Lab/R&D Q4
NJ Economic Development Authority
22,000
Average Annual Growth Rate 2001-2021: 1.2%
HQ, Research Facility
18,000
Top NIH-Funded Institutions (2017-2021) $326M Rutgers, The State University of N.J. $248M Princeton University $238M RBHS-New Jersey Medical School
2011
2017
2021
2012
2015
2013
2018
2019
2016
2014
2010
2001
2007
2020
2002
2005
2003
2008
2009
2006
2004
Bio Degree-Awarding Institutions, Metro Area • Rutgers University (New Brunswick) • Saint Peter’s University • William Paterson University • Princeton University
Research Contributor Jason Price jason.price@cushwake.com
Sources: Cushman & Wakefield Research, CoStar, National Institutes of Health (NIH), Emsi, Pitchbook
14 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
New York
Market Summary • New York City (NYC) is a rapidly growing recipient of life sciences investment capital, with venture capital funding climbing to $6.2 billion in 2021, a 52.6% increase over 2020. • Investors and developers worldwide continue to grow their presence in NYC as it has one of the most educated and diverse talent pools in the nation along with first class academic and medical institutions and premier venture capital ecosystems. • The life sciences industry has steadily expanded its footprint in NYC over the past several years with state and city incentives continuing to encourage developers to build labs for medical research. In 2021, the city government announced a doubling of its investment into the sector—$1 billion—to accelerate its growth: $430 million for new laboratory and incubator construction; $450 million for non-profit facilities; and $20 million for internship programs and start-up ventures. • NYC is continuing to expand its life sciences presence with 2.6 msf expected to be delivered within the next five years, including Alexandria Center’s North Tower, Deerfield’s 325,000 sf redevelopment of 345 Park Avenue South, and Taconic Partners’ 399,000 sf redevelopment of 125 West End Avenue.
Public & Private Funding (2021)
Rent vs. Vacancy Comparison
Fast Lab Stats 3.1 MSF Market Square
Company
Deal Type
Completed Type
$ Raised (MM)
35%
$120
Capsule Pharmacy
Later Stage VC Apr 2021
VC
$300.0
30%
$100
Immunai
Early Stage VC Oct 2021
VC
$274.0
25%
Footage $97 $ Per SF 32.8% Vacancy 58.2K Total Life Sciences Employment & Talent Pool 144% Life Sciences Employment Growth Rate Since 2001
$80
Immunai
Later Stage VC Dec 2021
VC
$204.0
Vacancy Rate
20%
Trialspark
Later Stage VC Sep 2021
VC
$159.5
$60
15%
Unite Us
Later Stage VC Mar 2021
VC
$150.0
$40
Paige
Later Stage VC Mar 2021
VC
$125.0
10%
HiberCell
Later Stage VC May 2021
VC
$114.4
$20
5%
Average Asking Rent $/sf
Elevation Oncology
IPO
Jun 2021
Public
$100.0
$0
0%
C2i Genomics
Early Stage VC Apr 2021
VC
$100.0
2015 2016 2017 2018 2019 2020 2021
Opentrons Labworks, Inc Later Stage VC Sep 2021
VC
$200.0
Asking Rents
Vacancy Rate
Representative Investment Sale Transactions (2021)
Address
Type
$ MM
RBA SF Date
Buyer
707 11th Ave
Office (will convert to Lab)
$95.0
160,000 Dec 2021
Beacon Hill Capital & Georgetown Co
$95.0 (plans to invest an additional $120.0M on conversion)
43-10 Court Sq
Industrial (will convert to Lab)
200,000 Dec 2021
Longfellow Real Estate Partners
Life Sciences Talent Pool
Representative Life Sciences Companies
Talent pool includes life science professionals not currently employed in the life science sector
Company
Type
NYU Langone
HQ
Representative Lease Transactions (2021)
38,000
Pfizer
HQ
35,059
Company
Address
Size (SF)
New/Renewal
Type
Quarter
Landlord
Mount Sinai
HQ
Mt. Sinai Icahn School of Medicine
787 11th Ave
165,000
New Lease
Office/Lab Q1
The Georgetown Company
34,000
Opentrons
45-18 Court Sq
95,000
New Lease
Office/Lab Q3
GFP Real Estate/ King Street Properties
Schrodinger
HQ
C16 Biosciences
619 W 54th St
19,000
New Lease
Office/Lab Q2
Silverstein/Taconic Partners
Flatiron Health
HQ
30,000
Black Diamond Therapeutics
430 E 29th St
18,120
New Lease
Office/Lab Q2
Alexandria Real Estate Equities
Imclone Systems LLC
HQ
Helaina
345 Park Ave S
18,000
New Lease
Office/Lab Q2
Deerfield Management
26,000
Opentrons
HQ
Average Annual Growth Rate 2001-2021: 0.7%
RegenLab USA
140 58th St (BioBAT)
15,000
New Lease
Office/Lab Q4
New York Economic Development Corp.
Roche
Research Facility
Immunai
430 E 29th St
12,288
New Lease
Office/Lab Q3
Alexandria Real Estate Equities
Number of Persons
22,000
Volastra Therapeutics
1361 Amsterdam Ave
10,000
New Lease
Office/Lab Q2
Janus Property Company
Intercept Pharmaceuticals, Inc. HQ
Hemogenyx
1361 Amsterdam Ave
10,000
New Lease
Office/Lab Q4
Janus Property Company
Kadmon
HQ
18,000
Envisagenics
30-02 48th Ave
7,500
New Lease
Office/Lab Q4
Alexandria Real Estate Equities
Top NIH-Funded Institutions (2017-2021) $2.5B Columbia University Health Sciences $1.9B New York University School of Medicine $1.9B Icahn School of Medicine at Mount Sinai
2011
2017
2021
2012
2015
2013
2018
2019
2016
2014
2010
2001
2007
2020
2002
2005
2003
2008
2009
2006
2004
Bio Degree-Awarding Institutions, Metro Area • Columbia University • New York University • Fordham University • City College of New York • New York Institute of Technology
Research Contributor Lori Albert lori.albert@cushwake.com
Reed Hatcher reed.hatcher@cushwake.com
Sources: Cushman & Wakefield Research, CoStar, National Institutes of Health (NIH), Emsi, Pitchbook
15 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Philadelphia
Market Summary • Philadelphia continues to be a top life sciences market, with 2021 seeing steady gains across almost all metrics. • When compared with other top life sciences markets, the Philadelphia market presents cost advantages in terms of average salaries and lab rents. • Cell and gene therapy companies dominated the market share of growth and new transactions in R&D, HQ and manufacturing facilities with Century Therapeutics, Carisma Therapeutics, Aro Biotherapeutics, Spirovant, AskBio (Bayer), and Interius all significantly expanding operations. • Spark Therapeutics/Roche announced plans to build a $575 million gene therapy R&D and manufacturing facility in University City, and WuXi AppTec announced plans to build a 1.7 msf testing and manufacturing facility in Delaware. • Local mRNA talent as well as the emergence of mRNA and cell and gene therapy cross-collaborations may fuel the next industry growth sector.
Public & Private Funding (2021)
Rent vs. Vacancy Comparison
Fast Lab Stats 17.8 MSF Market Square Footage $41.07 $ Per SF 5.0% Vacancy 38.6K Total Life Sciences Employment & Talent Pool 116% Life Sciences Employment Growth Rate Since 2001
Company
Deal Type
Completed Type
$ Raised (MM)
$50
12%
Century Therapeutics
IPO
Jun 2021
Public
$211.0
10%
$40
Nikang Therapeutics
Later Stage VC May 2021
VC
$200.0
8%
Century Therapeutics
Later Stage VC Feb 2021
VC
$160.0
Vacancy Rate
$30
Aro Biotherapeutics
Early Stage VC Dec 2021
VC
$90.3
6%
Sepax Technologies
Later Stage VC Nov 2021
VC
$78.1
$20
4%
Interius BioTherapeutics
Later Stage VC May 2021
VC
$76.0
$10
2%
MOBILion Systems
Later Stage VC Jul 2021
VC
$60.0
Average Asking Rent $/sf
Carisma Therapeutics
Early Stage VC Mar 2021
VC
$59.0
0%
$0
2015 2016 2017 2018 2019 2020 2021
iECURE
Early Stage VC Sep 2021
VC
$50.0
Mineralys
Early Stage VC Apr 2021
VC
$40.0
Asking Rents
Vacancy Rate
Representative Investment Sale Transactions (2021)
Address
Type
$ MM
RBA SF Date
Buyer
3701 Market St
Lab
$79.5
140,913 Jun 2021
GI Partners
Oaklands Corporate Center
Portfolio
$43.0
260,691 Nov 2021
Griffith Properties
Life Sciences Talent Pool
Representative Life Sciences Companies
400 Devon Park Dr
Lab Conversion
$19.5
138,065 May 2021
Mainstreet Capital
Talent pool includes life science professionals not currently employed in the life science sector
795 Horsham Rd
Lab Conversion
$14.5
110,000 Jan 2022
Eurofins
Company
Type
550 Blair Mill Rd
Lab Conversion
$12.1
97,123 Sep 2021
Spaulding & Slye
AstraZeneca
North America HQ
28,000
1850 N Gravers Rd
Lab Conversion
$7.7
72,000 Sep 2021
Spaulding & Slye
Century Therapeutics HQ, Research Facility
Amicus Therapeutics HQ, Research Facility
24,000
Representative Lease Transactions (2021)
GlaxoSmithKline
Research Facility
20,119
20,000
Company
Address
Size (SF)
New/Renewal
Type
Quarter
Landlord
J&J/Janssen
Regional HQ, Research Facility
Penn Gene Therapy
411 Swedeland Rd
150,000
New Lease
Office/Lab Q2
MLP Ventures
Teva Pharmaceuticals U.S. HQ
IQVIA
650 E Swedesford Rd
54,427
New Lease
Office/Lab Q4
Prologis
16,000
Endo
Research Facility
B.Labs
2929 Arch St
50,000
New Lease
Office/Lab Q2
Brandywine Realty Trust
Average Annual Growth Rate 2001-2021: 0.2%
Number of Persons
Merck
HQ, Research Facility
Idorsia Pharmaceuticals
100 Matsonford Rd
44,045
Renewal
Office/Lab Q4
Brandywine Realty Trust
12,000
Incyte
Research Facility
Biomeme
401 North Broad St
44,000
New Lease
Office/Lab Q2
Netrality Properties
Roche/Spark Therapeutics
HQ, Research Facility, Manufacturing
Avid Radiopharmaceuticals
3711 Market St
38,347
Renewal
Office/Lab Q4
Ventas
8,000
Roquette
727 Norristown Rd – Building 9
24,000
New Lease
Office/Lab Q3
Beacon
2011
Imvax
601 Walnut St
21,000
New Lease/Expansion cGMP
Q4
Keystone Property Group
2017
2021
2012
2015
2013
2018
2019
2016
2014
2010
2001
2007
2020
2002
2005
2003
2008
2009
2006
2004
Top NIH-Funded Institutions (2017-2021) $2.8B University of Pennsylvania $747M Children’s Hospital of Philadelphia $406M Temple University of The Commonwealth
Organon
727 Norristown Rd – Building 4
16,773
New Lease
Office/Lab Q1
Beacon
Intergral Molecular
One uCity Square
16,000
New Lease
Office/Lab Q4
Ventas
Bio Degree-Awarding Institutions, Metro Area • Drexel University • Temple University • University of Delaware
Research Contributor Michael Hanes michael.hanes@cushwake.com
• University of Pennsylvania • University of the Sciences
Sources: Cushman & Wakefield Research, CoStar, National Institutes of Health (NIH), Emsi, Pitchbook
16 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
Raleigh / Durham
Market Summary • One of the world’s largest life sciences clusters, North Carolina is home to 735 life sciences companies, 569 of which are located in the Research Triangle region in Raleigh/Durham. • Attracted to an extensive talent pool and stable business environment, several life sciences firms have recently announced plans to expand or develop new facilities. In total, the announcements reflect a $4 billion investment and the creation of 4,000 jobs. BioAgilytix Labs is one of many national companies that expanded their headquarters in 2021, with plans to create 878 jobs and invest $61.5M in Durham. • Demand for life sciences space remains strong, leading to numerous proposed projects (new construction and conversions) totaling approximately 8.2 msf. Nearly all new single-story construction is targeting cGMP/manufacturing occupants while the new R&D buildings will be multi-story facilities. • Rental rates are anticipated to go up as the quality of life sciences space improves. Additional factors such as dwindling land availability, along with increased land basis and increasing construction costs will also accelerate the increase in cost of life sciences space in Raleigh/Durham.
Public & Private Funding (2021)
Rent vs. Vacancy Comparison
Fast Lab Stats 12.3 MSF Market Square Footage $31.06 $ Per SF 12.3% Vacancy 19.4K Total Life Sciences Employment & Talent Pool 154% Life Sciences Employment Growth Rate Since 2001
Company
Deal Type
Completed Type
$ Raised (MM)
$35
25%
Bioventus
IPO
Feb 2021
Public
$120.0
$30
20%
StrideBio
Later Stage VC Mar 2021
VC
$81.5
$25
Xilis
Early Stage VC Jul 2021
VC
$70.0
Vacancy Rate
15%
$20
Istari Oncology
Later Stage VC Apr 2021
VC
$43.5
$15
10%
Inceptor Bio
Seed Round
Jun 2021
VC
$26.0
$10
Vestaron
Later Stage VC Feb 2021
VC
$21.0
5%
Myocardial Solutions
Later Stage VC Jun 2021
VC
$13.7
$5
Average Asking Rent $/sf
restor3d
Early Stage VC May 2021
VC
$13.3
$0
0%
2015 2016 2017 2018 2019 2020 2021
Cell Microsystems
Later Stage VC Nov 2021
VC
$12.7
Addyi
Later Stage VC Sep 2021
VC
$12.4
Asking Rents
Vacancy Rate
Representative Investment Sale Transactions (2021)
Address
Type
$ MM RBA SF Date
Buyer
The Stitch, 1001 Airport Blvd
Single tenant office/lab (former retail conversion)
$181.8
245,159 Dec 2021
Related Fund Management
Research Commons, 4101, 4301, 4501, 4201, & 4401 Research Commons
Partially leased office + land for conversion to life science campus
$138.0
429,758 Dec 2021
Oxford Properties Group
Representative Life Sciences Companies
Life Sciences Talent Pool
List represents top for-profit employers in the Research Triangle region based on employment.
The Genesis, 3029 E Cornwallis Rd
Partially developed site for conversion to life science campus
$91.0 100 acres Aug 2021
Alexandria Real Estate Equities
Talent pool includes life science professionals not currently employed in the life science sector
INQ 1101, 1101 Shiloh Glen Dr
Fully leased office/lab (former retail conversion)
$88.0
140,301 Dec 2021
TPG Capital
Company
Type
78 TW Alexander Dr
Lab
$50.5
236,976 Jun 2021
Eaton Vance RE
28,000
IQVIA
HQ, Contract Research
The Press, 2001 Evans Rd
Vacant office/warehouse for conversion to lab/cGMP
$38.0
276,812 Dec 2021
TPG Capital
Manufacturing and Administration
Perimeter's Edge, 1100 Perimeter Park Dr
Partially leased flex to lab conversion
$21.3
84,164 Sep 2021
Nuveen
Grifols
24,000
INQ 4300, 4300 Fayetteville Rd
Vacant retail for conversion to life science
$14.3
169,060 Dec 2021
DRA Advisors
Manufacturing, R&D, and Administration
Biogen
MidTown Biocenter, 350 E Six Forks Rd
Vacant retail for conversion to life science
$13.0
81,693 Nov 2021
East West Partners
20,000
BASF Agricultural Solutions
Research and Development
Average Annual Growth Rate 2001-2021: 0.5%
Representative Lease Transactions (2021)
16,000
Novo Nordisk Pharmaceutical Industries Manufacturing Syneos Health HQ, Contract Research Parexel International Corp HQ, Contract Research
Company
Address
Size (SF)
New/Renewal
Type
Quarter Landlord
12,000 Number of Persons
10,273
Invitae
The Stitch 1001 Airport Blvd Morrisville
250,000 New Lease Lab
Q2
Related Fund Management
Bradford & Berrington Centers 5827 & 5927 S Miami Blvd
Manufacturing and Administration
BioAgilytix Labs
173,928 New Lease/ Expansion
Lab
Q2 & Q4 Alidade Capital
8,000
bioMerieux Inc
Adverum Biotechnologies Inc (Subleased to Jaguar Gene Therapy) Parmer 14, 14 TW Alexander Dr
Office/Lab & Manufacturing Q1 & Q3 Alexandria Real Estate Equities
ICON
Contract Research
173,820 New Lease & Sublease
2011
2017
2021
2012
2015
2013
2018
2019
2016
2014
2010
2001
2007
2020
2002
2005
2003
2008
2009
2006
2004
Merck & Co. Inc
Manufacturing
CreeLED
Park Point Grid East & West 4001 NC 54
89,167 New Lease Office
Q3
Trinity Capital Advisors
Gilead Life Science
Midtown Plaza 305 Church at North Hills St
84,000 New Lease Office
Q2
Lionstone Partners
Bio Degree-Awarding Institutions, Metro Area
Top NIH-Funded Institutions (2017-2021) $2.8B Duke University $2.4B University of North Carolina Chapel Hill $890M Research Triangle Institute
Zoetis LLC
1050 Swabia Ct
78,394 New Lease Lab
Q2
W & G Associates
• Campbell University • Central Carolina Community College • Duke University • Durham Technical Community College • Meredith College • North Carolina Central University
• North Carolina State University • Shaw University • St Augustine’s University • University of North Carolina Chapel Hill • Wake Technical Community College • William Peace University
Azzur Cleanrooms
INQ 1101, 1101 Shiloh Glenn Dr Morrisville
75,300 New Lease Lab
Q2
TPG Capital
Xilis
31 Parmer Way
68,149 New Lease Office/Lab
Q4
Alexandria Real Estate Equities
Greenlight Bioscience
9 Laboratory Dr
62,772 New Lease Lab/Greenhouse Q3
Alexandria Real Estate Equities
BioLabs
Brightleaf Square 905 W Main
32,000 New Lease Lab
Q2
Asana Partners
Research Contributor Kristine Smith kristine.smith@cushwake.com
Sources: Cushman & Wakefield Research, CoStar, National Institutes of Health (NIH), Emsi, Pitchbook
17 / CUSHMAN & WAKEFIELD
LIFE SCIENCES 2022 MARCH UPDATE
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