Report: Demand for life science labs and R&D spaces hits record high, including Triangle
RALEIGH – Nationally, vacancy rates for existing life science labs and research and development spaces hit an all-time high of 4.9%, and average asking rental prices jumped 7.5 % between March and September 2021 in top 12 life science markets, a new report from CBRE says.
Raleigh-Durham is on CBRE’s list of the top 12 markets for the life sciences space, and the report notes that demand continues to be high in the region.
The demand is also driving new construction and updating of existing properties for life science purposes, with 1.2 million square feet of space currently under development or construction in the area, according to the report. .
“Life sciences companies collectively sought nearly 23.8 million square feet of new lab space in these 12 markets in the third quarter of this year,” read a statement summarizing the report, noting that this Demand far exceeds the amount of lab space under construction in these markets. 2.8 million square feet.
The Triangle is seeing strong demand for space for the life sciences, the release notes, with active and expanding cell gene therapy companies in the market.
Overall, there are over 6 million square feet of new life sciences inventory in the Triangle Market pipeline, according to CBRE, and currently has the second lowest average demand rate among the other 11. metropolitan areas, the most recent data showing an average of $ 29.11 per square foot NNN.
There’s a project underway at a former Raleigh mall that included a Kroger grocery store, for example.
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âOver the past two years, we’ve seen tremendous interest in our market from life science companies and investors,â CBRE | Raleigh Senior Vice President Ann-Stewart Patterson said in a statement. .
Life Science Logistics, headquartered in Dallas, Texas, announced in September that it would occupy 132,000 square feet of space near Raleigh-Durham Airport in a $ 15 million project that could create 50 to 100 jobs in the region as of April 2022, according to John Blackington, the director of business development, told WRAL TechWire in an interview Monday.
“Raleigh-Durham offers a variety of opportunities such as a lower cost to do business compared to other major markets, a strong talent pool from local universities, and a strong pipeline of new products to users.” , Patterson said. âContinued demand has created a strong hub for life sciences across our entire market which we plan to develop. “
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Blackington told WRAL TechWire in September that the company’s decision was made without considering or pursuing economic development incentives or grant programs, noting it was driven by growing customer demand.
According to the CBRE report, jobs in the life sciences and biotechnology industry are growing at the fastest rate on record, and the Triangle employed some 34,000 workers in the industry in 2020, with growth of l 5% employment overall and 6.7% in research and development roles.
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And more jobs in the industry are likely, CBRE predicted in its report, as demand for space for life sciences continues as well.
According to the report, more than 50 one-story buildings near Research Triangle Park have been sold to life science investors “for lab conversions planned over the past two years.”
This includes the sale of a property now known as The Stitch, which was previously the Morrisville Outlet Mall, becoming rezoned for life science purposes, which would later become leased by Invitae, WRAL TechWire reported in April. 2021.
The Stitch in Morrisville will house the Invitae facility, 374 jobs
The Town of Morrisville also recently amended zoning bylaws to allow the life sciences use of a property owned by Trinity Capital which spans some 109 acres and when completed will be known as from Spark LS, as reported by News & Observer.
Other investments in the life sciences industry include those made by Amgen, Tempus, Grail, among others, as well as the $ 2 billion investment by FUJIFILM Diosynth Biotechnologies, which also announced this week that it would hire more workers than originally planned and expand its facilities, again. , adding 89,000 square feet in Morrisville. Iqvia also planned to add hundreds of workers to a new 160,000 square foot facility.
Four years after the facility was announced, bluebird bio sold its Durham facility for $ 110 million in July 2021 to National Resilience, Inc., with the intention of developing a strategic partnership, and around 100 employees. bluebird bio were retained as a result of the transaction, WRAL TechWire reported in July 2021.
In November, Joel S. Marcus, Founder and Executive Chairman of Alexandria Real Estate Equities, told an audience at a Triangle Business Journal event that demand for life sciences was at an all time high, predicting a future positive for the Research Triangle and the entire Triangle Region, despite the economic disruption caused by the SARS-CoV-2 pandemic.
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Alexandria Real Estate Equities, which operates some 4 million square feet of life sciences space in the Triangle, was at the time helping two companies occupy a total of 274,000 square feet, Marcus said. .
In September, the company also acquired the former RTP Foundation headquarters along Davis Drive for $ 25 million.
Nationally, venture capital funding for U.S. life sciences firms topped the highest ever $ 30 billion in the 12-month period ended September 2021, according to the CBRE report , with around $ 586 million invested in Triangle businesses.