The life sciences industry has been thrust into the spotlight as the world faces its greatest public health crisis in a century. Investors have a heightened interest in the life sciences industry as it works to develop a vaccine and effective treatments for COVID-19, along with other medical breakthroughs. This, in turn, is creating increased demand for commercial real estate.
Key Insights
- Boston-Cambridge, the San Francisco Bay Area and San Diego remain the nation’s top three life sciences clusters, while Pittsburgh, Houston and Austin are top new emerging ones.
- While life science employment was down by just 1.3% in July from its peak in March, it was 1% higher than a year ago compared with the 7.6% decline in total nonfarm employment. Biotech R&D employment has been particularly strong, up by 4.9% from a year ago and outpacing tech employment growth.
- Total venture capital funding for the life sciences industry for the year ending Q2 2020 was a record $17.8 billion.
- National Institutes of Health funding to major universities and institutions for health-care research is forecast to grow by 6% this year to $42 billion.
- Total commercial laboratory space has grown by 12% this year to 95 million sq. ft. Another 11 million sq. ft. is currently under construction.
- Reflecting a broad pullback in commercial real estate investment, lab/R&D property sales totaling $9.6 billion for the year ending Q2 2020 fell by 18% from the same period a year ago. However, pricing remains intensely competitive.
- A continued positive outlook is underscored by new growth drivers, such as government emphasis on the life science industry’s pivotal role in combating the COVID-19 pandemic, onshoring trends and rapid expansion of biomanufacturing.
| Figure 1: U.S. Top Life Science Clusters | Figure 2: U.S. Top 10 Emerging Clusters | |
|
1. Boston-Cambridge |
1. Pittsburgh |
|
|
2. San Francisco Bay Area |
2. Houston |
|
|
3. San Diego |
3. Austin |
|
|
4. Washington, D.C. - Baltimore |
4. Detroit |
|
|
5. Raleigh-Durham |
5. Phoenix |
|
|
6. New Jersey |
6. Dallas/Ft. Worth |
|
|
7. Philadelphia |
7. St. Louis |
|
|
8. New York City |
8. Atlanta |
|
|
9. Seattle |
9. Portland |
|
|
10. Los Angeles |
10. Minneapolis |
|
|
11. Chicago |
||
|
12. Orange County, CA |
||
|
13. Denver-Boulder |
||
|
Source: CBRE Research, Q3 2020. Note: Ranked by size, growth and concentration of life sciences employment, concentration of R&D life sciences employment, size of laboratory inventory, and amount of NIH and life sciences venture capital funding. |
Source: CBRE Research, Q3 2020. Note: Ranked by size and growth of life sciences employment, concentration of R&D life sciences employment, amount and growth of life sciences venture capital funding and NIH funding. |
A Day in the Life (Sciences): The Where and Why of the Bio-Boom
The Life Sciences industry is booming around the world. CBRE specialists Ian Anderson, Joanne Henderson and Steve Purpura join Spencer to analyze the growth of bio-tech clusters and what it means for real estate usage and investment.
Explore More Life Sciences Thought Leadership
For additional insights, please contact Ian Anderson, Alan Koder, Cerise Marcela, Dino Perazzo and Steve Purpura.
Reopening the World’s Workplaces for Life Sciences
What will a Lab of the Future look like?
CBRE Life Sciences
Connect with a CBRE professional
For More Information, Please Contact
