36 Million SF New Construction to be Delivered in the Top 14 Life Sciences Markets

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BOSTON—As life science investment sales more than triple, more than 36 million square feet of new construction is expected to be delivered in the top 14 life science markets across the United States, according to a report by Newmark.

In the 2020 Year-End: Life Science National Overview & Top Market Clusters report, Newmark said that the pandemic has accelerated both tenant and institutional investor demand for life science real estate in 2020, from wet lab and incubator space to biomanufacturing and R&D properties.

Here are other key highlights from the Newmark report:

  • Low lab vacancy rates across life science markets reflect significant demand and limited supply of existing wet lab space.
  • Institutional investors and landlords across the largest life science clusters are actively reevaluating “highest and best use” for their portfolios and are considering converting their properties to meet immediate life science demand.
  • The concentration of life science investment volume as a percentage of total office volume reached a record high of 16.4% in 2020, more than double the 2019 figure.
  • Average monthly pricing for United States life science investment sales has more than tripled from the May 2020 trough, reaching $627 PSF in December.

The report said the following are the top life sciences clusters in the country:

  1. Boston/Cambridge
  2. San Francisco Bay Area
  3. San Diego
  4. Raleigh/Durham
  5. Seattle
  6. Philadelphia
  7. Maryland
  8. New York City
  9. Los Angeles/Orange County
  10. New Jersey
  11. Houston
  12. Denver/Bulder
  13. Chicago
  14. Austin.

SOURCE: Newmark