2023 March Life Sciences Update

Executive Summary

• Rising Risk Factors: The overall U.S. vacancy rate has ticked up 70 basis points (bps) to 9.2% year-over year (YoY). Sublease space has also ticked up, rising 60 bps YoY, but remains relatively constrained at 1.6%. • Fundamentals Remain Strong: Annual rent growth was strong across most markets, growing by double digits in nine of the 15 markets tracked. Vacancy rates remain low in most markets, with nine of the 15 markets falling below 10%. • Labor Demand Remained Robust in 2022: Life sciences job postings grew across all three major markets, as employers continued to seek talent to fill open positions: U.S. up 30% YoY, Canada up 52% YoY and UK up 15% YoY. • Funding Fell from Peak Levels: Global funding totaled $66.6 billion, down 45% from peak 2021 levels. • Clinical Trial Activity Driving Future Demand: Excluding 2021, there were more ongoing trials in 2022 than any other year in the past two decades. Currently, there are approximately 44,500 active clinical trials among the markets tracked by Cushman & Wakefield. • Emerging Markets: An introduction to emerging life sciences markets across global regions.

In the last decade, the life sciences sector has been defined by accelerated growth. As an emerging commercial real estate (CRE) sector, that growth has translated into a robust construction pipeline, delivering millions of square feet of gleaming new space, double digit rent growth, single-digit vacancy rates, and unbridled investor and occupier enthusiasm. Investment has flowed into the sector from both private and public sources to both occupiers and investors. With the gold rush sentiment of 2021 largely subdued in 2022, many are asking where the sector is headed. Drivers for the life sciences sector remain strong. An ever-aging global population that requires medicines and therapies will continue to be one of the primary beneficiaries of biotech research and development. The synergy between technology and science will drive the innovations of the next century and facilitate the development of processes to streamline production and distribution of drugs and therapies. As the sector matures, the CRE associated with life sciences will mature as well. Growing from an emerging, niche sector to a more mature sector can mean that double-digit growth ebbs and is replaced by a more muted growth environment. Investment continues to flow into the life sciences sector, and while the peak of 2021 funding and growth may not be replicated in the short term, the sector will continue to grow in the long term.



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