Life Sciences Update | 2022 October

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2022 OCTOBER

Life Sciences Update

Contents

Following extraordinary investment, expansion, and innovation in 2021, the life sciences industry is poised for further growth and consistent demand in the years ahead. Going forward, capitalising on the latest trends in technology will be more critical than ever as these advancements are continuously reshaping the way we research, develop, test, go to market and analyse data in life sciences. Even though its trajectory is intact, the sector is not immune, however, to overarching economic factors like inflation, higher interest rates and tightening capital markets, which are impacting investors and life sciences companies looking to occupy space within a tight budget. Positioned for Continued Growth

Positioned for Continued Growth Real Estate Fundamentals Remain Strong

02

This 2022 Life Sciences Update breaks down the current trends in the life sciences industry by exploring: • Strength of the real estate fundamentals; • The ongoing labour crunch; • How the economic slowdown is impacting the industry; and • The continued flow of funding into life sciences. The report also contains a market-by market analysis, providing detailed overviews of key life sciences markets across the globe.

03

The Labour Crunch

06

The Impact of the Economic Slowdown

09

Flow of Funding

11

Future Demand

14

Market Summaries

17

United States

18

Canada

31

United Kingdom

35

Appendix

39

2 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

The life sciences sector has experienced outsized growth in the last seven years. U.S. asking rents are 67% higher, on average, than in 2015, and inventory has grown in tandem by 29% across the markets tracked by Cushman & Wakefield Research. UK rents have grown 63% since 2017, on par with U.S. markets. Real Estate Fundamentals Remain Strong

3 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Real Estate Fundamentals Remain Strong

Life Sciences: Asking Rents, Q2 2022 Current Rent & 7-Year Growth

Life Sciences: Vacancy Rate, Q2 2022 Total Vacancy Rates by Components

Direct Vacancy

Sublease Vacancy

Rent

Rent Change 2015-2022 (rhs)

New York City Chicago Denver Raleigh/Durham New Jersey San Francisco Bay Area Boston San Diego Philadelphia Seattle Suburban Maryland Los Angeles

1.8%

$100 $120

100% 120%

4%

4%

$0 $20 $40 $60 $80

0% 20% 40% 60% 80%

5%

6%

9%

11%

12%

13%

16%

28%

32%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Source: Cushman & Wakefield Research

Source: Cushman & Wakefield Research

Although rents have continued to grow in Q2 2022 in several markets from year-end, including double digit growth in Seattle (+27.2%) and San Diego (+31.3%), a few markets experienced some softening with four markets seeing asking rents fall from year-end levels: Boston (-4.5%), San Francisco Bay area (-3.3%) and New Jersey (-1.2%). Despite this two-quarter decline, rents are currently higher than year-end 2019 pre-pandemic levels, up 13.1% in Boston, 30.4% in the San Francisco Bay area, 31% in Cambridge and 2.5% in New Jersey. Vacancy rates remain low in most markets, with rates below 10% in five U.S. markets, including Los Angeles (1.8%), Suburban Marylan d ( 3. 5 %), Seattle (3.8%), Philadelphia (5%), San Diego (5.7%) and Boston (9.1%). Vacancy rates increased slightly in the first half of 2022 in five of the 12 U.S. markets as some vacant sublease space has entered the market.

U.S. vacant sublease inventory increased 37% from year-end 2021 levels. This number is likely to increase as more vacant sublease space has entered the market during recent months. Current sublease space, however, accounts for just 1% of total inventory in the U.S. This is slightly higher for markets with more vacant sublease space but not by much: the San Francisco Bay area (4%) and Raleigh / Durham (4%).

4 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Real Estate Fundamentals Remain Strong

Projected Growth, Lab Inventory Current Inventory & Under Construction

New Construction Pipeline, Next 18 Months Expected Construction Completions, U.S. markets, 2022-2023

Pre-leased

Available

Current Inventory

Under Construction

U/C as % of Inventory

100%

50%

60

0.2

90%

0.1

50

80%

40%

0.6

0.2

4.0

70%

40

30%

3.1

2.6

60%

30

50%

0.6

2.1

MSF

20%

Completions (MSF)

20

1.0

40%

0.2

10%

10

30%

0.7

0.2

2.7

20%

0

0%

1.0

0.7

10%

0%

Boston Chicago Denver New York Philadelphia Raleigh San Diego San Francisco

Seattle

Source: Cushman & Wakefield Research

Source: Cushman & Wakefield Research

Current projects under construction in the U.S. are expected to add an additional 26.6 million square feet (msf) of lab space to existing inventory. Boston has the largest construction pipeline with 13.9 msf of new space under construction, which comprises 43% of Boston’s current lab space inventory. After Boston, the largest construction pipelines are in San Diego (3.7 msf), San Francisco (3.5 msf), Seattle (1.5 msf) and Los Angeles (1.4 msf). In the UK, lab inventory is expected to grow 50% with a total of 3.6 msf of new space under construction.

In the U.S., there are approximately 19.9 msf of near-term deliveries scheduled for 2022-2023, or 74% of the current construction pipeline. For projects due to be completed in 2022, 60% of the space is pre-leased. In Boston, an estimated 6.7 msf of new inventory is due to be completed by 2023, with 2.7 msf currently pre-leased. Life sciences leasing activity in the U.S. markets totaled 7.2 msf for the first half of 2022. The average deal size in Q2 was 74,000 sf. The top three markets with the highest leasing volume in the first half were San Diego (2.2 msf), Boston (1.8 msf), and the San Francisco Bay area (1.2 msf).

5 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

The Labour Crunch

Life sciences employment in the U.S. has grown at an accelerated pace, doubling in size over the last ten years and outpacing total employment with an annual growth rate of 6.6% vs. the 1.2% annual average for total U.S. employment. UK life sciences employment has grown 5.8% annually over the last ten years, on par with growth in the U.S.

6 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

The Labour Crunch

Correlation between Talent & Lab Space Life Sciences Inventory & Employment Pool, Select Markets

Current U.S. Life Sciences Job Postings Outpace Hirings

Avg Monthly Hires

Avg Monthly Postings

70

20 25 30 35 40 45 50

Double the pre pandemic average

60

San Francisco Bay Area

50

Washington DC Metro

Boston

San Diego

40

Raleigh / Durham

Philadelphia

30 Thousands

0 5 10 15

New Jersey

Denver

Seattle

Los Angeles

20

London

Life Sciences Inventory (MSF)

Cambridge

Chicago

New York City

Oxford

10

0

20

40

60

80

100

120

Employment Pool (Thousands)

Source: Lightcast, Cushman & Wakefield Research

Source: Lightcast

Growth in demand for life sciences employees has mirrored lab space inventory growth as employers race to meet the needs of this growing sector. The San Francisco Bay area and Boston have two of the largest employment base and consequently the largest life sciences inventory. New York City also has one of the largest life sciences employment bases in the country due to its large research institutions which include Weill Cornell Medical Center, NYU Langone and Memorial Sloan Kettering, among others. Investment grade lab and cGMP space, however, are in the early stages in New York City. More space will be added with the planned 325,000 sf redevelopment of 345 Park Avenue South by Deerfield and Taconic Partners’ 399,000 sf redevelopment of 125 West End Avenue. Competition for talent in an overall very tight labour market has heated up in the life sciences sector with postings for life sciences jobs at currently double the pre-pandemic levels. In the U.S., year-to-date through August 2022, there have been a total of 413,120 life sciences occupation

postings, a 28% increase from the same period last year. This level of postings translates into a 3:1 ratio with unique jobs, meaning that every three postings equate to one unique job for a total of 137,707 jobs. U.S. hiring is lagging the pace of job postings when compared to the pre-pandemic period of 2018-2019. Some recently announced layoffs in the sector, however, have loosened some of the tightness in the labour market for employers as laid off life sciences workers have typically been able to find new employment relatively quickly. Canadian job postings also accelerated year-over-year (YoY) with 22,146 through August 2022, up 95%, with a 3:1 intensity. UK job postings decelerated from 2021 levels totaling 324,519 through August 2022, down 22%, with a 2:1 intensity.

7 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

The Labour Crunch

Next Generation Talent: A Look at Enrollments in Major U.S. Universities

Annual Completions for U.S. Life Sciences Degrees

75

There’s currently a robust pipeline of talent in life sciences degree programmes in the U.S. as annual completions for life sciences degrees grew by 60% over the last ten years. Completions hit a plateau in the two years leading up to the pandemic. Growth decelerated from 6.3% annually from 2013-2016 to 1.4% in the period between 2017-2020. U.S. educational requirements for life sciences employment skew to higher education degrees with three-fourths of the job postings mentioning higher ed degrees and 47% of all postings indicating at least a bachelor’s degree required to apply. According to data published by the Coalition for Next Generation Life Science, there are currently about 75,000 enrollments in life sciences higher education programmes in 34 schools across the U.S. These enrollments include Bachelor’s, Master’s and Ph.D. programmes focused on training the next generation of life sciences professionals. While not all of them will enter the labour markets in life sciences, this is a pool that employers can tap in the coming years to fill the growing number of job openings.

70

65

Entering the job market

60

55

50

45

Thousands

40

35

30

25

Source: Lightcast

8 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Will the current economic slowdown impact the life sciences sector or is it insulated from recessionary pressures? Take a look at sector performance during the last two recessions. The Impact of the Economic Slowdown

9 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

The Impact of the Economic Slowdown

Employment: R&D in Biotechnology Industry

U.S. Employment Growth by Decade (Average Annual) Largest YoY Growth (+14.5%) in Past 30 Years

Total Employment (U.S.)

Life Sciences (U.S.)

Office-Using (U.S.)

Industrial (U.S.)

Hi-Tech (U.S.)

300

286

7%

6.6%

275

6%

250

5%

225

4%

200

2.9%

2.7%

3%

175 Thousands

2.4%

2.3%

1.9%

1.8%

2%

1.7%

150

1.4%

1.2%

0.4%

0.7%

1%

125

0.5%

0.3%

0.3%

100

0%

2001

2003 2005 2007 2009 2011

2013 2015 2017 2019 2021

1992-2002

2002-2012

2012-2022

Source: U.S. Bureau of Labour Statistics

Source: U.S. Bureau of Labour Statistics

Economic headwinds seem to have slowed the life sciences momentum of the past few years. But as we head into either a recession or a general economic cooling, the sector is well positioned to weather the uncertainty brought on by periods of economic slowdown. Life sciences employment in the U.S. has been resilient in previous recessions, with minor drops during the Dot-Com Recession (DCR) and Great Financial Crisis (GFC). Additionally, life sciences employment did not falter during the pandemic. There was only one month of job losses (April 2020 declined by -0.1%) and YoY job growth was +11.4% in 2021 and +14.5% as of June 2022. Canadian life sciences employment has remained resilient through the pandemic, adding over 13,000 jobs in the sector, a 16% increase from 2019. The UK experienced a slight employment deceleration in the life sciences sector, shedding just over 9,000 jobs since 2019. However, the bulk of the losses occurred in 2020 and the sector has added over 2,000 jobs since then.

Life sciences employment has also outperformed other sectors over the last 30 years. It has outpaced sector growth in the last 10- and 20-year periods and has proved more resilient during recessions. During the DCR, industrial, office-using and hi-tech employment all experienced at least eight quarters of negative growth, while life sciences only experienced two. During the GFC, these sectors also experienced at least eight quarters of negative growth, while life sciences had six. These sectors all experienced at least two quarters of negative employment growth due to the pandemic, while life sciences continued to grow. On a YoY basis, life sciences outpaces these sectors, industrial (4.8%), office-using (4.8%) and hi-tech (5.1%).

10 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Flow of Funding

The global life sciences venture capital funding market experienced a slowdown in the first half of 2022 relative to the same period in 2021.

11 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Flow of Funding

Global Life Sciences Venture & Public Offering Capital Venture Capital

Public Offerings

North America

Europe

APAC

North America Europe APAC

$18

$50

$45

$16

$40

$14

$35

$12

$30

$10

$25

$8

Billions

Billions

$20

$6

$15

$4

$10

$2

$5

$0

$0

2010 2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: PitchBook Data, Inc.; *Data has not been reviewed by PitchBook analysts, 2022 as of June 30

North American private equity (PE) funding totaled $23.6 billion through June 2022, down 15% YoY. A dearth of life sciences initial public offerings (IPO) totaled $1.1 billion, a significant drop from $9.1 billion for the first half of 2021, but similar to first half of 2017 levels. Other global regions have also experienced a drop in venture capital (VC) funding and IPOs. VC funding in major European markets totaled $3.5 billion in the first half of 2022, down 42% YoY and IPO activity was muted at $65 million, significantly lower than the $2.4 billion offerings from the same period last year. APAC saw slightly less deceleration with VC funding totaling $8.2 billion, a 25% drop YoY and IPO volume at $2.7 billion, down 53% YoY. Low IPO activity in the first half of 2022 can be attributed to volatility in the overall equities market which impacted the life sciences sector. As biotech share prices fell from 2021 highs,

companies put their IPO plans on hold as they wait for more market visibility. Prices have recently rebounded slightly and are currently at pre-pandemic levels. Although life sciences VC funding levels fell on a YoY basis, some markets saw higher funding activity. The San Francisco Bay area (+83%), New Jersey (+76%), Raleigh / Durham (+42%) and Montreal (+15%) all experienced increased VC funding in the first half of 2022. Looking at individual deal activity, the two largest deals that transacted in 2022 include Altos Labs’ $3 billion and Ultima Genomics’ $600 million funding. Both of these companies are headquartered in the San Francisco Bay area.

12 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Flow of Funding

Total Annual U.S. NIH Funding Over Time

Top Markets in NIH Funding for the Previous Five Years (2018-2022)

$40

1

Boston

$16.2 B

9

San Diego

$6.3 B

$35.8

$35

2

New York City

$13.1 B

10 Chicago

$5.7 B

$30

Baltimore / Suburban MD (I-270)

11

Houston

$5.1 B

3

$10.5 B

$25

12

Pittsburgh

$3.7 B

4 San Francisco Bay Area $10.4 B

$20

13

Ann Arbor

$3.4 B

Average Annual Growth Rate

5

Raleigh / Durham $8.5 B

$15

Billions

14 Saint Louis

$3.3 B

$10

1995-2021: +5.5%

6 Seattle

$6.8 B

2016-2021: +7.6%

15

Atlanta

$3.1 B

$5

7

Los Angeles

$6.7 B

$0

8

Philadelphia

$6.4 B

2011

1997

1995

2017

2012

2021

1998

2015

2013

1996

1999

2018

2016

2019

2014

2001

2010

2007

2002

2020

2005

2003

2008

2006

2009

2004

2000

Source: U.S. National Institutes of Health, Cushman & Wakefield Research, 2022 as of June 30, 2022

Source: U.S. National Institutes of Health, Cushman & Wakefield Research, 2022 as of June 30, 2022

NIH at Peak Levels Total U.S. National Institute of Health (NIH) funding grew by 3.1% YoY in 2021. At $35.8 billion, it is the highest year on record, easily outpacing 2019 funding by 15.9%. Growth in funding over the past five years has averaged +7.6% per year, which is faster than the 26-year average (+5.5%). Funding for the current year totals $22.1 billion as of June 2022. This is on pace to meet this year’s NIH federal funding budget of $45 billion.

The top 10 life sciences markets also attract the most NIH funding. As a percent of total, these markets garnered 49% of total funding in the first half of 2022. Boston, New York City and Suburban Maryland have received the largest flow of funds in the last five years and are home to some of the largest research institutions in the country.

13 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Future Demand

The flow of venture capital into the life sciences sector has accelerated the growth of new companies with seed and early-stage companies still experiencing significant momentum.

14 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Future Demand

Seed and Early-Stage Companies Attract Capital

Clinical Trials by Stage

Seed and Early-Stage Funding

Top 10 Markets

Phase 4 4%

Early Phase 1 1%

Generating Revenue Startup Pre-Clinical Trials Clinical Trials Other

Other 4%

20% 30% 40% 50% 60% 70% 80% 90% 100%

Clinical Trials 7%

Phase 1 11%

Pre-Clinical Trials 13%

Phase 1 | Phase 2

Phase 3 40%

Generating Revenue 51%

Phase 2 31%

0% 10%

Startup 25%

Phase 2 | Phase 3

Source: PitchBook Data, Inc.; *Data has not been reviewed by PitchBook analysts.

Source: Clinicaltrials.gov

For the markets tracked by Cushman & Wakefield, 50% of the life sciences VC deals through August 2022 involved a seed or early-stage deal, with the average deal size of $38 million. Of these deals, 38% included companies that are at a startup or pre-clinical trials business stage. Many of these companies are in the early growth stages as they seek to accelerate their platform, which can include the expansion of their existing lab and office footprint.

Among the top 10 markets that attracted the greatest flow of funds into seed and early-stage deals, capital was significantly focused on revenue generating companies in Boston, Raleigh / Durham, Philadelphia and Greater Los Angeles. In the San Francisco Bay area, Seattle and London, funding was largely focused on startups. In New Jersey, the pharmaceutical hub of the U.S., funding flowed mainly to companies focused on clinical trials.

Another indicator of CRE growth and demand among life sciences companies is clinical trials activity. Currently, there are approximately 63,000 active clinical trials among the markets tracked by Cushman & Wakefield. Just over half of these trials are in the early to Phase 2 stages, which include exploratory trials, safety trials and short-term adverse events. Clinical trials in Phase 3 make up 40% of all trials and are focused on further studies of a drug’s safety and effectiveness, as well as interactions with other drugs. Life sciences companies at any stage of clinical trials may be in a position to expand into more space depending on the requirements of their trials, however, Phase 3 trials generally include larger groups of participants, which would typically require a larger staff headcount and space. Phase 4 clinical trials are conducted post-FDA approval for marketing.

15 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Future Demand

U.S. Novel Drug and Biological Approvals, FDA

Number of Clinical Trials By Market

Clinical Trials by Type

8,000

Novel Drug Approvals Biologicals

7,000

90

6,000

80

Other 25%

5,000

70

4,000

60

3,000

50

Drug 54%

2,000

40

Device 10%

1,000

30

0

20

Biological 11%

10

0

2015 2016 2017 2018 2019 2020 2021 2022YTD

Source: U.S. Food and Drug Administration

Source: Clinicaltrials.gov

In the U.S., when companies receive FDA approval, they need to quickly move into a manufacturing capacity. The FDA has worked to improve their approval processes and have, over time, increased the number of approvals for novel drugs and biologicals. 1 Although 2022 appears to be behind the uptick in approvals of the last four years, drug-related clinical trials account for 54% of the current trials in the U.S., indicating a robust pipeline of activity for future FDA approvals.

Drug trials account for 54% of clinical trials across the markets that Cushman & Wakefield tracks. Biological and device trials account for 11% and 10% of clinical trials, respectively. All other trials, including behavioural and diagnostic testing, make up the remaining 25%. The top five markets with the greatest number of clinical trials currently include New York, Boston, Los Angeles, Philadelphia and Chicago. These markets boast some of the largest hospital systems and medical universities, where many of these clinical trials take place.

1 Vaccines, allergenic products, blood and blood products, plasma derivatives, cellular and gene therapy products.

16 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

Market-by-Market Analysis

United States Boston Chicago Denver Greater Los Angeles New Jersey New York Philadelphia Raleigh / Durham San Diego San Francisco Bay Area Seattle Suburban Maryland (I-270 Corridor)

Canada Montreal Toronto Vancouver

United Kingdom Cambridge

London Oxford

17 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

United States

Boston Chicago Denver Greater Los Angeles New Jersey New York Philadelphia Raleigh / Durham San Diego San Francisco Bay Area Seattle Suburban Maryland (I-270 Corridor)

18 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

FAST FACTS 5

Boston

Market Summary • Big Pharma continues to drive the life sciences market, with notable leases coming from Takeda, AstraZenca, and Vertex. All three leases were signed in Q2 2022 for a total of 1.5 msf. • 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 13.9 msf of lab product is either under construction or in preconstruction phases, with 48% being preleased. Total inventory of lab product is likely to exceed 40.0 msf by 2025. • A lack of readily available, developable land in Kendall Square, the biotechnology industry center, led to the formation of new industry area hotspots. These include Boston’s Seaport District and numerous areas within Watertown, with continued growth in Waltham, Somerville and Lexington. • Sublease space has become increasingly prominent in the past six months. With growing uncertainty surrounding the current economic conditions, several life sciences companies are pausing hiring, and seeking alternative uses for their space.

Public & Private Funding (2022)

Rent vs. Vacancy Comparison

Fast Lab Stats

$95

10%

Company

Deal Type

Completed Type $ Raised (MM)

32.4 MSF Market Square Footage $80.32 $ Per SF 9.1% Vacancy 94K Total Life Sciences

Tessera

Later Stage VC Feb 2022

VC

$300.0

$85

8%

HilleVax (NAS: HLVX) IPO

Apr 2022

IPO

$230.0

Vacancy Rate

$75

Amylyx (NAS: AMLX) IPO

Apr 2022

IPO

$216.0

6%

$65

CinCor Pharma (NAS: CINC)

IPO

Jan 2022

IPO

$193.6

$55

4%

LifeMine

Later Stage VC Mar 2022

VC

$175.0

$45

ConcertAI

Later Stage VC Mar 2022

VC

$150.0

2%

Saliogen Therapeutics Early Stage VC May 2022 VC

$132.3

Average Asking Rent $/sf

$35

Be Biopharma

Early Stage VC Apr 2022

VC

$130.0

0%

$25

Korro Bio

Early Stage VC Jan 2022

VC

$116.0

Employment 80.6% Life Sciences Employment 10-Year Growth Rate

2015 2016 2017 2018 2019 2020 2021 2022

PepGen (NAS: PEPG) IPO

May 2022 IPO

$108.0

Asking Rents

Overall Vacancy

Sublease Vacancy

Representative Investment Sale Transactions (2022)

Address

Type

$/psf

$ MM

RBA SF

Date Buyer

100 Binney St*

Lab

$2,356

$ 1,020.0

432,932

Apr 2022 CBRE Global Investors

Representative Life Sciences Companies

Life Sciences Labor: Average Monthly Job Postings and Hires

451 D St*

Lab

$1,483

$708.0

477,132

Jun 2022 GI Partners

Company

Type

Cambridgeside**

Lab

$2,278

$815.0

357,734

Jan 2022 Alexandria RE

1,000 1,500 2,000 2,500 3,000 3,500

Biogen

HQ

300 Third St*

Lab

$2,656

$237.0

131,963

Jan 2022 CBRE Global Investors

bluebird bio

HQ

Representative Lease Transactions (2022)

Bristol Myers Squibb

Regional HQ

CRISPR Tx

HQ

Company

Address

City

Size (SF) New/Renewal

Type

Quarter

Landlord

Moderna Tx

HQ

Takeda

585 Third St

Cambridge

600,000

New

Lab

Q2 BiodMed Realty

Novartis

Regional HQ

AstraZeneca

290 Binney St

Cambridge

570,000

New

Lab

Q2 Boston Properties

0 500

Pfizer

Regional HQ

Vertex

22 Drydock Ave

Boston

344,000

New

Lab

Q2 Related Beal

Sanofi

Regional HQ

Eli Lilly

15 Necco St

Boston

334,000

New

Lab

Q1

Alexandria

2018

2019 2020 2021

2022

Takeda Ph

Regional HQ

Intellia

840 Winter St

Waltham

139,984

New

Lab

Q1

Alexandria

Hires Unique Postings

Vertex Ph

HQ

Vericel Corporation 25 Network Dr

Burlington

125,749

New

Lab

Q1

Nordblom

Kymera

Arsenal on the Charles

Watertown

100,624

New

Lab

Q1

Alexandria

$2.5B Massachusetts General Hospital $1.7B Brigham and Women’s Hospital $942M Boston Children’s Hospital Top NIH-Funded Institutions (2018-2022)

Bio Degree-Awarding Institutions, Metro Area • Boston University • University of Massachusetts Boston • Harvard University • MIT • Boston College • Northeastern University • Tufts University • Massachusetts College of Pharmacy and Health Sciences

Annual Life Sciences Degree Completions 2010 3,926

Enanta

Arsenal on the Charles #2 Watertown

73,037

New

Lab

Q2 Alexandria

T2 Biosystems

290 Concord Rd

Billerica

70,125

New

Lab

Q1

Farley White

Sartorious

200 Donald Lynch Blvd

Marlborough

56,174

New

Lab

Q2

Minardi Limited

Avencell

500 Forge St

Watertown

55,776

New

Lab

Q1

Boylston Properties

2020 6,429 Up 64%

Research Contributors Matthew Giordano matthew.giordano@cushwake.com

*Recapitalization ** Portfolio Sale

Will Mitchell will.mitchell@cushwake.com

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

19

/ CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2022 OCTOBER

FAST FACTS 5

Chicago

Market Summary

Public & Private Funding (2022)

Rent vs. Vacancy Comparison

Fast Lab Stats

• Life sciences companies are taking note of Chicago’s world-class research universities, talent pipeline, robust network of existing companies, and its competitive cost compared to other major life sciences markets. • Chicago’s life sciences ecosystem has seen unprecedented growth, with substantial capital infusion into the market and the development of funding and mentorship programs like The University of Chicago Innovation Fund and Chicago Biomedical Consortium’s Entrepreneurial Fellows Program to build viable businesses from local talent and discoveries. • Chicago is home to market-leading global pharmaceutical companies including Abbott Laboratories, AbbVie, Baxter, and Pfizer and two national labs in Argonne and Fermilab. • Notable recent developments include Trammel Crow’s Fulton Labs at 400 N Aberdeen St, which opened its doors in March 2022. Sterling Bay’s highly anticipated ALLY at 1229 West Concord Pl is set to deliver in 2023 and will anchor the multi-billion-dollar Lincoln Yards development with 285,000 sf of research space.

$55

30%

Company

Deal Type

Completed Type $ Raised (MM)

3.6 MSF Market Square Footage $50.25 $ Per SF 27.7% Vacancy 38.5K Total Life Sciences Employment 6.3% Life Sciences Employment 10-Year Growth Rate

Nucleai

Early Stage VC Mar 2022

VC

$33.0

$50

25%

Emalex Biosciences Later Stage VC May 2022 VC

$25.0

Vacancy Rate

$45

20%

CancerIQ

Later Stage VC Mar 2022

VC

$14.0

MAIA Biotechnology IPO

Jul 2022

IPO

$10.0

$40

15%

Cardio Diagnostics

Seed Round May 2022 VC

$6.7

$35

10%

Grove Biopharma

Early Stage VC Jun 2022

VC

$3.0

MAIA Biotechnology Early Stage VC Mar 2022

VC

$2.4

Average Asking Rent $/sf

$30

5%

ResQ Pharma

Later Stage VC Jun 2022

VC

$0.2

$25

0%

2015 2016 2017 2018 2019 2020 2021 2022

Asking Rents

Overall Vacancy

Sublease Vacancy

Representative Lease Transactions (2022)

Company

Address

Size (SF) New/Renewal

Type

Quarter

Clever Carnivore

2430-2432 N Halsted

4,179 Sublease

Office

Q1

Representative Life Sciences Companies

Life Sciences Labor: Average Monthly Job Postings and Hires

Celadyne Technologies

1375 West Fulton St

3,263 New Lease

Lab/Office

Q2

Company

Type

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

AbbVie

HQ

Abbott

HQ

Baxter International

HQ

Baxalta Incorporated Regional Office Horizon Therapeutics North American HQ Astellas Pharma North American HQ Luminex Regional Office Pfizer Regional Office Lundbeck HQ Sysmex North American HQ

- 200 400 600 800

2018

2019

2020 2021

2022

Hires Unique Postings

Top NIH-Funded Institutions (2018-2022) $1.6B Northwestern University at Chicago $1.0B University of Chicago $656M University of Illinois at Chicago

Bio Degree-Awarding Institutions, Metro Area University of Chicago Northwestern University

Annual Life Sciences Degree Completions

• • •

2010 5,907 2020 7,953 Up 35%

University of Illinois Chicago Illinois Institute of Technology Loyola University Chicago DePaul University

Research Contributors

Gregory Rogalla gregory.rogalla@cushwake.com

Mason Herleth mason.herleth@cushwake.com

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

20

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LIFE SCIENCES UPDATE | 2022 OCTOBER

FAST FACTS 5

Denver

Market Summary

Public & Private Funding (2022)

Rent vs. Vacancy Comparison

Fast Lab Stats

• The Denver/Boulder market has solidified itself as an emerging life sciences hub by promoting growth and innovation due to the leading research institutions, federal labs and nearly 600 life sciences companies calling Denver/Boulder home. • Industry growth has been fueled by a strong STEM labor pool, favorable taxes and incentives, and an abundance of capital and funding from both the private and public sectors. • Denver/Boulder’s life sciences industry has become more diversified in the past three years, as numerous biotech and R&D-focused organizations move to the area and existing companies grow their footprints. • The Denver/Boulder market is also home to a vibrant start-up community due to the strong incubator and innovation centers that reside in the region. • The life sciences market continues to expand, with growth primarily concentrated in Boulder County and Northwest suburban submarkets such as Broomfield, Louisville, Gunbarrel and Longmont.

Company

Deal Type

Completed Type $ Raised (MM)

10% 12% 14% 16% 18% 20% 22%

$16

5.1 MSF Market Square Footage $14.69 $ Per SF 16.2% Vacancy 7.8K Total Life Sciences Employment 27.1% Life Sciences Employment 10-Year Growth Rate

Cerebral Therapeutics Later Stage VC Jun 2022 VC

$40.0

$14

Cerapedics

Later Stage VC Feb 2022 VC

$25.0

$12

Vacancy Rate

Eon (Other Healthcare Services)

$10

Later Stage VC Apr 2022 VC

$16.0

Pathware

Later Stage VC Apr 2022 VC

$7.0

$8

Telebelly Health

Seed Round

May 2022 VC

$0.6

$6

0% 2% 4% 6% 8%

Triopsy

Later Stage VC Jun 2022 VC

$0.3

$4

Validus Cellular Therapeutics

Average Asking Rent $/sf

Early Stage VC Jun 2022 VC

$0.1

$2

$0

Neurexis Therapeutics Early Stage VC May 2022 VC

$0.1

2015 2016 2017 2018 2019 2020 2021 2022

Accelerator/ Incubator

Asking Rents

Overall Vacancy

RadTran

May 2022 VC

$0.1

GelSana

Grant

Mar 2022 VC

$0.01

Representative Life Sciences Companies

Life Sciences Labor: Average Monthly Job Postings and Hires

Representative Investment Sale Transactions (2022)

Address

Type

$ MM

RBA SF

Date Buyer

Company

Type

700

Flatiron Park

Office/Flex

$625.2

1,030,000 Q2 2022 BioMed Realty

Medtronic

Regional Office

1685-1775 38th Street

Office/Flex

$85.3

258,100 Q2 2022 Breakthrough Properties

600

Pfizer

Research Facility

2950-2990 Wilderness Place

Flex

$39.5

72,800 Q2 2022 Steelwave

500

Eli Lilly Research Facility Agilent Technologies Research Facility Terumo BCT HQ AGC Biologics Research Facility SomaLogic HQ Biodesix HQ KBI Biopharma Research Facility Enveda Biosciences HQ

2685 Wilderness Place

Flex

$18.6

44,800 Q1 2022 Beacon Capital Partners

400

300

Representative Lease Transactions (2022)

200

Company

Address

Size (SF) New/Renewal

Type

Quarter Landlord

100

SomaLogic

1350 & 1452 S 96th St

196,920 New

Direct

Q1 United Properties

-

Biodesix

919 W Dillion Rd

79,980 New

Direct

Q1 Koelbel and Company

2018

2019

2020 2021

2022

Bio-Techne

10771 E Easter Ave

73,781 New

Direct

Q1 The Alliven Group

Hires Unique Postings

VitriVax

5435 Airport Blvd

10,368 New

Direct

Q1 Unico Properties

Top NIH-Funded Institutions (2018-2022) $1.3B University of Colorado Denver $246M University of Colorado $195M National Jewish Health

Bio Degree-Awarding Institutions, Metro Area University of Colorado – Denver University of Colorado – Boulder • •

Annual Life Sciences Degree Completions

2010 792

Research Contributors

Colorado State University

2020 1,256 Up 59%

Cara Stamp cara.stamp@cushwake.com

Eli Snyder eli.synder@cushwake.com

Minh Ngo minhngo@cushwake.com

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

21

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LIFE SCIENCES UPDATE | 2022 OCTOBER

FAST FACTS 5

Greater Los Angeles

Market Summary

Public & Private Funding (2022)

Rent vs. Vacancy Comparison

Fast Lab Stats

• With approximately 8.5 msf of regional lab inventory, the Greater Los Angeles life sciences market has emerged as a growth market with great potential. Though smaller in scale compared to its national contemporaries, a surplus of aged and obsolete industrial flex and office space provides a hardy supply of renovation opportunities to meet the growing demand. • Many of the submarkets across Greater Los Angeles are viable locations for the life sciences industry due to their proximity to world class institutions or because they are anchored in areas with significant workforce tailored towards the industry. These clusters include South Bay (El Segundo), LA North (Thousand Oaks), Tri-Cities (Pasadena), the Westside (Culver City, Santa Monica, etc.) and Orange County. In 2022, a large portion of activity was concentrated in the LA North, LA West, South Bay and Tri-Cities markets. • Los Angeles life sciences companies continue to move on low-rise/flex product, which is more desirable and can be adapted to fit their unique needs (i.e., floor size, loading capabilities, ceiling heights, ability to vent and above standard power). • More developers are contemplating intensive renovations/space makeovers as well as new ground up projects to attract companies in the life sciences sector looking to commit to larger space requirements. • Asking rents continue to rise and set new records for newer space, ranging from $60 NNN psf to $72 NNN psf on an annual basis. Due to economic headwinds, there is a growing risk that recent growth can be tempered over the next few years.

Company

Deal Type

Completed Type $ Raised (MM)

$60

6%

Fast Lab Stats 8.5 MSF Market Square Footage $54.75 $ Per SF 1.8% Vacancy 41K Total Life Sciences

Cloudbreak Pharmaceutical

Later Stage VC Jan 2022

VC

$130.0

$55

Path

Early Stage VC Jan 2022

VC

$56.0

Vacancy Rate

$50

4%

Baylx

Early Stage VC Apr 2022 VC

$47.1

$45

Vascular Dynamics

Later Stage VC May 2022 VC

$20.0

AiVita Biomedical

Early Stage VC Mar 2022 VC

$19.0

$40

2%

TriFlo Cardiovascular Early Stage VC Jun 2022

VC

$13.8

$35

Holoclara

Later Stage VC Jul 2022

VC

$11.5

Average Asking Rent $/sf

$30

Pictor Labs

Seed Round May 2022 VC

$7.6

Amydis

Later Stage VC Apr 2022 VC

$5.7

Employment 10.6% Life Sciences Employment 10-Year Growth Rate

0%

$25

2015 2016 2017 2018 2019 2020 2021 2022

Celestial Therapeutics

Angel

Jul 2022

VC

$0.9

Asking Rents

Overall Vacancy

Sublease Vacancy

Representative Investment Sale Transactions (2022)

Address

Type

$ MM RBA SF

Date

Buyer

Representative Life Sciences Companies

Life Sciences Labor: Average Monthly Job Postings and Hires

5005 McConnell Ave

Lab (R&D)

$58.7

56,306

Mar 2022

NexCore Group/Nuveen

30401 & 30501 Agoura Rd Office (20% lab)

$29.7

114,570

Mar 2022

Gemdale USA

Company

Type

3,000

2201 Corporate Center Dr

Lab (R&D)

$15.7

76,252

Jan 2022

Cruzan

Kite Pharma

R&D

2,500

Amgen

Pharmaceutical

Representative Lease Transactions (2022)

Edwards Life Sciences

Medical Devices

2,000

Masimo

Medical Devices

Company

Address

Size (SF) New/Renewal

Type

Quarter

Landlord

1,500

Sanofi/Genzyme

Pharmaceutical

Armata Pharmaceuticals 5005 McConnel Ave

55,000 New

Direct

Q1

Hatch Spaces

1,000

Celgene

R&D

Terray Therapuetics

750 E Royal Oaks

38,000 New

Direct

Q2

Samuelson & Fetter

500

Xencor

R&D

Confidential

2101 Corporate Center Dr

12,000 New

Direct

Q2

Alexandria Real Estate Equities, Inc.

0

Baxter

Pharmaceutical

Confidential

2101 Corporate Center Dr

11,000 New

Direct

Q2

Alexandria Real Estate Equities, Inc.

2018

2019

2020 2021

2022

Seigfreid

Pharmaceutical

Eli Lily (Protomer Technologies)

Hires Unique Postings

26 Euclid

10,000 New

Direct

Q2

Alexandria Real Estate Equities, Inc.

Grifols

R&D

Appia Bio

6160 Bristol

6,000 New

Expansion

Q2

Alexandria Real Estate Equities, Inc.

Bio Degree-Awarding Institutions, Metro Area California Institute of Technology University of California – Los Angeles University of Southern California University of California – Irvine California State Polytechnic U, Pomona • • • • •

Annual Life Sciences Degree Completions

Top NIH-Funded Institutions (2018-2022) $2.6B University of California Los Angeles $1.4B University of Southern California $780M University of California-Irvine

Capsida

1300 Rancho Conejo

4,000 New

Direct

Q2

Alexandria Real Estate Equities, Inc.

Parallel Bio

5380 Alhambra

4,000 New

Direct

Q2

Hatch Spaces

2010 6,811

2020 14,644 Up 115%

Research Contributor

Eric A. Kenas eric.kenas@cushwake.com

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

22

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LIFE SCIENCES UPDATE | 2022 OCTOBER

FAST FACTS 5

New Jersey

Market Summary

Public & Private Funding (2022)

Rent vs. Vacancy Comparison

Fast Lab Stats

• New Jersey has exhibited notable growth from pharmaceutical and biotechnology companies as a result of its offering these companies a strategic location in the heart of the Northeast corridor, a talented and experienced workforce and a supply chain infrastructure that enables companies to grow. • The market for move-in ready lab space remains tight amid the growth of small and mid-sized life sciences firms during the year. Vacancy has steadily diminished since 2018 and stands at 11.9%. Despite the lack of available laboratory space in the market, new development has been limited due to the long approval process and the high cost of construction. • The future pipeline remains bright with proposed developments at the ON3 campus in Nutley, BeiGene’s new manufacturing and clinical R&D center at the Princeton West Innovation Center in Hopewell, and new progress being made at The Cove in Jersey City.

Company

Deal Type Completed Type

$ Raised (MM)

$39

10% 12% 14% 16% 18%

14.2 MSF Market Square Footage $35.54 $ Per SF 11.9%

Areteia Therapeutics VC

Jun 2022

VC

$350.0

$37

Apprentice

VC

Jan 2022

VC

$100.0

Vacancy Rate

$35

Ceptur Therapeutics VC

Jan 2022

VC

$75.0

Enalare Therapeutics VC

Aug 2022

VC

$55.0

$33

iView Therapeutics

VC

Jan 2022

VC

$30.0

0% 2% 4% 6% 8%

$31

Vascular Therapies

VC

Mar 2022

VC

$27.7

$29

Vacancy 59K Total Life Sciences Employment 7.4% Life Sciences Employment 10-Year Growth Rate

Onkos Surgical

VC

Jun 2022

VC

$26.5

Average Asking Rent $/sf

Elucida Oncology

VC

Mar 2022

VC

$22.3

$27

BioAegis Therapeutics

VC

Mar 2022

VC

$22.0

$25

2015 2016 2017 2018 2019 2020 2021 2022

ArrePath

VC

Mar 2022

VC

$20.0

Asking Rents

Overall Vacancy

Sublease Vacancy

Representative Life Sciences Companies

Representative Investment Sale Transactions (2022)

Company

Type

Bristol Myers Squibb

HQ, Research Facility, other HQ, Research Facility, other

Address

Type

$ MM RBA SF

Date

Buyer

Life Sciences Labor: Average Monthly Job Postings and Hires

55 Corporate Dr

Office/Lab

$261.0

674,340 Jan 2022

AVG Partners

Johnson & Johnson

200 Metro Blvd

Office/Lab

$131.7

332,818

Apr 2022

Cantor Fitzgerald

2,500

701/801 Princeton South Corporate Center

Merck

HQ, Research Facility, other

Office/Lab

$39.5

110,945

Mar 2022

Baring Real Estate Advisors

2,000

Bayer

HQ, Research Facility, other

700 Route 202/206

Office/Lab

$39.0

143,869

Apr 2022

Maxim Properties

1,500

350 Carter Rd

Lab

$34.0

78,992

May 2022

Ares Management Corporation

Pfizer

Regional Office, Research Facility

1,000

Sanofi

Regional Office, Research Facility

Representative Lease Transactions (2022)

500

Novartis

Regional Office, Research Facility

Company

Address

Size (SF) New/Renewal

Type

Quarter Landlord

Novo Nordisk

Regional Office

0

400/500 Warren Corporate Center Dr

Rubenstein/Vision Real Estate Partners

PTC Therapeutics

361,718 New Lease

Office/Lab

Q2

Teva Pharmaceuticals Regional Office, Research Facility PTC Therapeutics HQ, Research Facility

2018

2019 2020 2021

2022

Access Bio

7 Fitzgerald Ave

152,736 Sublease

Lab/R&D

Q1

The KRE Group

Hires Unique Postings

USPL Nutritionals LLC 1200 Jersey Ave

125,000 New Lease

Lab/R&D

Q1

Elion

Cellares

95 Corporate Dr

118,208 New Lease

Office/lab

Q2

Steiner Equiries

Top NIH-Funded Institutions (2018-2022) $315M Rutgers, The State University of N.J. $240M RBHS-New Jersey Medical School $237M Princeton University

Bio Degree-Awarding Institutions, Metro Area

Annual Life Sciences Degree Completions

Dlabs

95 Mayhill St

108,000 Renewal

Lab/R&D

Q2

Winter Properties

Rubenstein/Vision Real Estate Partners

Gilead

369-379 Interpace Pkwy

96,391 New Lease

Office/Lab

Q2

• • • •

Rutgers University

2010 3,828 2020 5,547 Up 45%

The College of New Jersey

Access Bio

65 Clyde Rd

79,183 Renewal

Lab/R&D

Q2

Blackstone

Seton Hall University Princeton University

Kyowa

510 Carnegie Ctr

78,464 New Lease

Office/Lab

Q2

Boston Properties

Research Contributor

John Obeid john.obeid@cushwake.com

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

23

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LIFE SCIENCES UPDATE | 2022 OCTOBER

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