Life Sciences Update | 2022 October
Animated publication
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
/ CUSHMAN & WAKEFIELD
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
/ CUSHMAN & WAKEFIELD
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
/ CUSHMAN & WAKEFIELD
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
/ CUSHMAN & WAKEFIELD
LIFE SCIENCES UPDATE | 2022 OCTOBER
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