Boston – The U.S. life sciences industry and the real estate that it occupies have ridden a wave of momentum into this year that has positioned various industry hubs, from cornerstones such as Boston to emerging hotspots like Seattle, for outsized growth, according to a new report from CBRE.
That momentum has several markets ascendant on CBRE’s ranking of the top established and emerging life sciences hubs.
The Boston-Cambridge market, for example, is the No. 1 life sciences cluster in the U.S., has 1.9 million sq. ft. of lab space under construction, and received the largest amount of finding in the nation from the National Institutes of Health.
“Demand for laboratory space coupled with vacancy rates in the low single digits continues to apply upward pressure on rental rates in Boston-Cambridge,” said Steve Purpura, Vice Chairman leading CBRE’s Life Sciences business. “As the pace of innovation and growth in the life sciences industry continues to accelerate, it is safe to assume that the Boston-Cambridge Lab market will remain extremely tight for the foreseeable future.”
Numerous indicators point to robust expansion for the industry, including the 86 percent increase in venture-capital funding for U.S. life sciences companies to $15.8 billion for the year ended in September from the previous year. Additionally, life sciences lab space under construction in the industry’s five largest U.S. markets expanded by 101 percent last year to 6.0 million sq. ft.
CBRE’s report focuses on the human life-sciences industry, which encompasses manufacturing, testing and research-and-development work in the fields of biotechnology, pharmaceuticals and medical devices.
CBRE analyzed and ranked the top established life sciences hubs by weighing four main criteria for each market: number of scientists in key industry categories, industry funding for local life sciences companies, size and long-term growth of their life sciences workforce, and their inventory of industry lab space.
Top 10 Established Life Sciences Markets
||6.) Washington, D.C.-Baltimore|
|2. San Francisco Bay Area||7.) New York City|
|3. San Diego||8.) Philadelphia|
|4. New Jersey||9.) Los Angeles|
|5. Raleigh-Durham||10.) Chicago|
Beyond the established hubs, CBRE analyzed the next tier of emerging hubs to determine which are climbing quickly up the national ranks. CBRE ranked the emerging hubs based on their three-year growth in life sciences employment; NIH funding; quality and quantity of educational institutions for life sciences studies; number of medical research and health-services institutions; and their depth of high-tech workers. Nine met the criteria to be ranked as fast-growing, emerging hubs.
Top Emerging Life Sciences Hubs
|2. Houston||7. Dallas-Fort Worth|
|3. Austin||8. Atlanta|
|4. Minneapolis||9. Pittsburgh|
|5. St. Louis|
“Multiple indicators point to sustained, strong growth for the life sciences industry, which makes life sciences labs and offices an ideal focus for developers and investors,” said CBRE’s Purpura. “Few industries offer this much expansion potential, but much of the activity happens in a select number of special markets.”