H1 2024 Life Sciences Update Market Summaries

New Jersey

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Market Summary

Public & Private Funding (2024 1H)

Rent vs. Vacancy Comparison

Fast Lab Stats

• Although New Jersey’s life sciences market displayed signs of cooling during 2023, the sector still recorded several noteworthy transactions. Kenvue secured a total of 289,488 sf of office and lab space at the Summit East campus, while Avantor signed a 61,120-sf lease at 77 Corporate Drive in Bridgewater. Additionally, Cellares is opening a facility at 95 Corporate Drive in Bridgewater, which will produce 40,000 cell therapy batches annually, supported by $255 million in series C funding. • The first half of 2024 confirmed a slowdown in demand, primarily due to a decrease in venture capital (VC) funding. By mid-2024, VC funding totaled $90 million, a notable decline from $205 million in the first half 2023 and $435 million during the same period in 2022. Consequently, new leasing activity fell, with only 26,892 sf leased this year. The largest new transaction was Regen Lab’s 15,792-sf lease at 95 Greene St. in Jersey City, following their move from Brooklyn. Another notable transaction was Syneos Health’s 43,865-sf renewal at 301 College Road East in Princeton, which demonstrates their ongoing commitment to the market. • Supply constraints for lab space have persisted, largely due to a lack of new speculative construction. As of the second quarter of 2024, the overall vacancy rate stood at 11.1%, with significant variations across different regions. The I-78 and I-287 corridor boasted the lowest vacancy rate at 3.2%. The conversion to lab use of 77 Corporate Drive in Bridgewater is expected to alleviate some supply pressures in that submarket. In contrast, Northern New Jersey (NNJ) and the Princeton/Route 1 markets faced higher vacancy rates of 20.2% and 16.1%, respectively. Vacancy in NNJ was influenced by large blocks of space at 95 Greene St. in Jersey City, Merck’s former campus in Kenilworth and a full building vacancy at 185 Tabor Road in Morris Plains. Notable vacancies in the Princeton/Route 1 market included available space at 311 Pennington Rocky Hill Rd. in Hopewell on both a direct and sublet basis, along with a 96,018-sf sublease at 2 Clarke Drive in Cranbury.

$39

14%

Company

Deal Type

Completed VC Round $ Raised (MM)

19.3 MSF Market Square Footage $37.10 $ Per SF 11.1% Vacancy 62.7K Total Life Sciences Employment 18.7% Life Sciences Employment 10-Year Growth Rate

$37

12%

Claris Bio

Later Stage VC Jan 2024 1st Round

$57.0

Evergreen Theragnostics

Later Stage VC Mar 2024 4th Round

$26.0

$35

10%

Vacancy Rate

Chromocell Therapeutics (ASE: CHRO)

$33

8%

IPO

Feb 2024

$6.6

$31

6%

Cayaba Care Couragene

Early Stage VC Mar 2024 3rd Round

$4.4 $1.0 $0.7 $0.7

$29

4%

Seed Round

May 2024 2nd Round

iView Therapeutics Later Stage VC May 2024 2nd Round

$27

2%

Average Asking Rent $/sf

Vuja De Sciences

Later Stage VC May 2024 2nd Round

$25

0%

Accelerator/ Incubator

2015 2017 2019 2021

2023

4M Therapeutics

Jan 2024

Asking Rents

Overall Vacancy

Sublease Vacancy

Stevenson Search Partners

Later Stage VC Jan 2024 1st Round

Representative Life Sciences Companies

Life Sciences Labor: Average Monthly Job Postings and Hires

Representative Lease Transactions (2024 1H)

Company

Address

Size (SF) New/Renewal

Type

Quarter Landlord

Company

Type

1,000 1,200 1,400 1,600 1,800 2,000

Bristol Myers Squibb

Syneos Health RegenLab USA

301 College Road East, Princeton 95 Greene Street, Jersey City

43,865 Renewal 15,792 New Lease

Direct Direct

Q2 National Business Parks

HQ, ResearchFacility, other

Q1

Thor Equities

Johnson & Johnson

HQ, ResearchFacility, other

Merck

HQ, ResearchFacility, other

0 200 400 600 800

Bayer

HQ, ResearchFacility, other

Sanofi

RegionalOffice, ResearchFacility RegionalOffice, ResearchFacility

Novartis

Novo Nordisk RegionalOffice Teva Pharmaceuticals RegionalOffice, ResearchFacility PTC Therapeutics HQ, ResearchFacility

2020 2021

2022

2023 2024

Hires Unique Postings

Top NIH-Funded Institutions (2020-2024 1H) $338M RBHS-New Jersey Medical School $288M Rutgers, The State University of N.J. $231M Princeton University

Bio Degree-Awarding Institutions, Metro Area • Rutgers University • The College of New Jersey • Seton Hall University • Princeton University • NJIT

Annual Life Sciences Degree Completions

2013 4,690 2023 5,689 Up 21%

Research Contributors John Obeid john.obeid@cushwake.com

Sources: Cushman & Wakefield Research, CoStar, National Institutes of Health (NIH), Lightcast, Pitchbook

CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2024 FEBRUARY