Life Sciences 2020: The Future is Here

MARKET SUMMARY

FAST LAB STATS

• The San Francisco Peninsula life sciences market consists of nearly 22 million sf, and is primarily located in the submarket of San Mateo County (19.0 msf). The lack of availability in San Francisco County (0% vacancy) has led to robust demand in the surrounding markets, resulting in a 7.5% vacancy rate in the larger San Mateo market. • The Peninsula has been the long-time home of many major life sciences firms including Genentech and Gilead. The entire sector has been heavily supported by major Bay Area research institutions including Stanford, UCSF and UC Berkeley. • Though Biotech is king, there have been many other types of companies including equipment developers and software producers for the life sciences industry. There has also been a wave of start-ups of all types that have entered the market. • Life sciences companies have a long history on the Peninsula and, much like technology companies in the Bay Area, a deep talent pool has been created here. • More than 1.0 msf of life sciences property delivered in 2019 and there is much more to come either via new ground-up development or in conversions of other product types. With a low vacancy rate and major new construction underway, there has been significant pre-leasing activity which will push net absorption into record positive territory as the new product delivers. • One large recent pre-lease completed by a tech tenant in the bastion of life sciences, South San Francisco, was Stripe relocating out of San Francisco proper into 412,000 sf at Oyster Point. • The San Francisco CBD life sciences sector is very small due to competition for space from tech companies. The Mission Bay submarket is a medical/life sciences center started by Kaiser and UCSF hospitals and medical offices. The Class A buildings are

21.8 MSF MARKET SQUARE FOOTAGE AVERAGE ASKING RENT (PER SF) $84.00 22K TOTAL EMPLOYEES +252% TOTAL EMPLOYEES SINCE 2010 (SAN FRANCISCO MSA)

& PENINSULA

7.5% VACANCY

SAN FRANCISCO recently constructed with life science-related build-outs. Submarkets outside of Mission Bay may have a handful of life science build-outs moving forward but will need rezoning. TOP LIFE SCIENCES COMPANIES

LIFE SCIENCES TALENT POOL: 22,550

Number of Persons 19,000 19,500 20,000 20,500 21,000 21,500 22,000 22,500 23,000

COMPANY

TYPE

Genentech

Biotech

Gilead Sciences

Drug Discovery

Abbvie

Big Pharma Big Pharma Big Pharma Big Pharma

Pfizer

Astra Zeneca Janssen (J&J)

Average Annual Growth Rate 2001-2018: 0.8%

Natera

Biotech

Merck

Big Pharma

Verilly (Alphabet)

Biotech Biotech Biotech

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

Counsyl

Source: EMSI

Nektar Therapeutics

TOP THREE NIH-FUNDED INSTITUTIONS

UNIVERSITY OF CALIFORNIA, SAN FRANCISCO $2.9B

STANFORD UNIVERSITY $2.2B

NORTHERN CALIFORNIA INSTITUTE $152M

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