• Twitter
  • Facebook
  • Instagram
  • Linkedin
  • RSS
  • Sign In
  • My Account
High-Profile MonthlyNew England Facilities Development News
  • All News
      • Up Front
      • Groundbreaking
      • Topping Off
      • Ribbon Cutting
      • View All Up Front Stories
      • 3_808-Windsor-Topping-OffSecond Building Tops Off for 1.8M Sq. Ft. Boynton Yards Development
      • Special Features
      • Contributor
      • Green
      • J.E.D.I.
      • Mechanical / Electrical / Plumbing (MEP)
      • Vision
      • Women In Construction
      • Regions
      • Connecticut
      • Northern New England
      • Popular Sectors
      • Cannabis
      • Corporate
      • Education
      • Healthcare
      • Interiors
      • Landscape/Civil
      • Life Science
      • Multi Residential
      • Restoration/Renovation
      • Retail/Hospitality
      • Senior/Assisted Living
      • Technology & Innovation
      • Other News
      • Awards
      • Community
      • COVID-19
      • Mixed-use
      • Municipal
      • National/International
      • Organizations and Events
      • People
      • Philanthropy
      • Products and Services
      • Real Estate
      • Training and Recruitment
  • Subscribe
  • Membership
  • Next Issue
  • Archive
  • Advertise
  • Podcast
  • Events
    • Industry Events
    • A/E/C Associations
High-Profile Monthly
  • All News
      • Up Front
      • Groundbreaking
      • Topping Off
      • Ribbon Cutting
      • View All Up Front Stories
      • 3_808-Windsor-Topping-OffSecond Building Tops Off for 1.8M Sq. Ft. Boynton Yards Development
      • Special Features
      • Contributor
      • Green
      • J.E.D.I.
      • Mechanical / Electrical / Plumbing (MEP)
      • Vision
      • Women In Construction
      • Regions
      • Connecticut
      • Northern New England
      • Popular Sectors
      • Cannabis
      • Corporate
      • Education
      • Healthcare
      • Interiors
      • Landscape/Civil
      • Life Science
      • Multi Residential
      • Restoration/Renovation
      • Retail/Hospitality
      • Senior/Assisted Living
      • Technology & Innovation
      • Other News
      • Awards
      • Community
      • COVID-19
      • Mixed-use
      • Municipal
      • National/International
      • Organizations and Events
      • People
      • Philanthropy
      • Products and Services
      • Real Estate
      • Training and Recruitment
  • Subscribe
  • Membership
  • Next Issue
  • Archive
  • Advertise
  • Podcast
  • Events
    • Industry Events
    • A/E/C Associations
Contributor

Continued Growth in Life Sciences Fuels Development

December 28, 2021

by Suzanne Duca and Taylor Stucky

The life sciences market has never been stronger. With 2021 wrapping up, how will the market fare moving into 2022? While many ponder whether or not we are in a bubble brought on by COVID-19, our data points to this not being the case. With revolutionary technology, advances in discovery and innovation, and an aging population in need of better medical care, the life sciences are more pertinent and accessible than ever.

In the third quarter, demand for lab space in Boston-Cambridge surged to a record of 23.8 million sq. ft. of tenant requirements, outstripping unleased, speculative construction. Thirty-three percent of the 21.4 million sq. ft. of speculative lab/R&D space under construction is already pre-leased with the majority in Boston-Cambridge. Over 50% of the projects expected to deliver by the end of 2022 in Boston-Cambridge are pre-leased. In the last three years, Boston-Cambridge’s lab inventory has more than doubled, reaching 42 million sq. ft. Across the U.S., many office and industrial facilitates are being converted to life science to keep up with demand. There are 3.2 million sq. ft. of lab conversions underway in Boston-Cambridge alone. In 2021, investment in life sciences lab/R&D properties skyrocketed. As the need for lab/R&D space appears to have no near-term end in sight, developers and investors have been paying a premium for office properties slated for life sciences conversion compared to conventional office properties.

With average U.S. lab/R&D vacancy below 5%, space available cannot keep up with the demand from eager tenants. In Boston-Cambridge, lab/R&D vacancy fell from 2.5% in the first quarter to 1.1% in the third quarter of 2021. Conventional office vacancy in the market was markedly higher at 12.7%. In addition to decreasing vacancy rates, eight of the 12 top U.S. markets saw increased rents from March 2021 to September 2021 as companies expanded and young companies moved out of incubators and into their own spaces. Asking rates in the top markets reached nearly $95 NNN per sq. ft. per year.

Suzanne Duca

As space is being consumed, U.S. biotechnology R&D jobs are growing at their fastest recorded rate. Life sciences is now a leading source of U.S. employment growth, with biotech R&D employment growing faster than even the technology sector. This growth is fueled by historic levels of funding. Venture capital funding posted a new high of over $32 billion for the fiscal year. Seventy life sciences IPOs generated $10.8 billion as of October 2021 – more than double the funding of three years ago – with more than $13 billion projected by the end of 2021. Seventy percent of U.S. venture capital funding went to Boston-Cambridge ($10.7 billion), San Francisco Bay Area ($6.7 billion), and San Diego ($5.1 billion). Funding is expected to continue this upward trajectory into 2022.

Taylor Stucky

Robust fundamentals moving into 2022 and continued interest from developers, landlords, venture capital companies, and tenants suggest another strong year ahead for the life sciences sector.

Suzanne Duca is director of research, and Taylor Stucky is senior field research analyst at CBRE.

forecast HPNews Jan'22
    FacebookTwitterLinkedInEmail

You may also like

Contributor • Education

Data and Demographics: Driving the...

March 8, 2023
Contributor • Education

2023 Update from SCUP North...

March 8, 2023
Contributor • Education

A Message from SCUP President...

March 8, 2023
Contributor • Education

Linking Mission-infused Campus...

March 2, 2023
Contributor • Education

Designing Equitable Experiences...

February 28, 2023
Contributor • Education

Academia Driving Deployment of...

February 28, 2023
Contributor • Education

What Is a Program Evaluation...

February 27, 2023
Contributor • Education

Expanding the Possibilities of...

February 27, 2023

View the March 2023 issue!

Read the WIC 2023 Supplement!

Read HP’s 25th Anniversary Issue now!

Check out the 2022 Annual Green Supplement!

Read HP’s 2022 MEP issue!

Read our annual supplements!

  • Green2022.png
  • WIC2023.png
  • MEP2022.png
  • Vision-2019.png

HIGH-PROFILE MONTHLY
615 School St.
Pembroke, MA  02359
Phone: 781 294 4530
Fax:  781 293 5821
info@high-profile.com

Quick Links

  • About Us
  • Contact Us
  • Subscribe
  • Advertise
  • My Account

Stay Informed

Sign up for Fast Facts Friday, our weekly e-newsletter, and stay up-to-date with the latest industry news!

Sign up
Subscribe to High-Profile Monthly to receive an email notice of each new article!
Loading

Copyright © 2023 High-Profile Monthly.

  • Twitter
  • Facebook
  • Instagram
  • Linkedin
  • RSS
  • Sign In
  • My Account