COVID-19 accelerates momentum nationwide for life sciences real estate demand, Boston remains on the top

0
686

BOSTON – The U.S. life sciences cluster rankings were recently released in the JLL 2020 U.S. Life Sciences Outlook, which tracks top markets as well as the growth of nascent markets with growing levels of interest by life science companies and investors alike.

Boston retained its ranking as the leader among U.S. life sciences ecosystems and one of the top recipients of venture capital (VC) investment. JLL research shows investor interest in life sciences has never been higher, both on the funding and real estate front. New requirements for suburban GMP space led the charge for an increase in overall tenant demand for the second quarter.

“For the first time, suburban lab demand is double that of Kendall Square,” offers Don Domoretsky, the head of JLL’s Life Science Practice in Boston. “This increase in demand is being fueled by strong development activity in the suburbs, companies re-evaluating their space needs, and a growing need for GMP manufacturing space in close proximity to Cambridge and Boston. In fact, demand for manufacturing space in Greater Boston is the highest it’s been in over five years, representing over 30% of the active life science demand in the marketplace currently. Much of this demand is tied to the success of local cell and gene therapeutics companies ramping up clinical production.”

With over 50 local universities, multiple world-class research hospitals, and over $15 billion of private venture capital investment over the last three years, Greater Boston remains the epicenter of life science activity in the country, if not the world. The amount of scientific research and development firms in Greater Boston has increased by 51% over the last five years, to 1,983 today.

Beyond COVID-19 catalyzing life-sciences innovation, the upcoming expiration of a suite of patents creates an opportunity for mid-tier life sciences companies to pursue new long-term profit sources. Many new products on the market and in development are curative rather than therapeutic, increasing marketing potential and overall category growth.

“Investors such as King Street Properties, Alexandria Real Estate Equities and Hobbs Brook Management will continue to look for opportunities to convert existing office space,” Domoretsky also noted. “These firms are also seeking opportunities to develop new facilities in core markets like Lexington, Waltham and Watertown; as well as those further afield, such as Marlborough, Westborough and the Middlesex Corridor of Burlington, Billerica and Andover.”