A life sciences supercluster emerges in the northeast: CBRE
BOSTON – The life sciences industry has taken firm hold in the Northeastern United States, cementing and increasing its presence in all of the region’s major metropolitan areas, according to a CBRE report.
According to CBRE’s Leading Life Science Clusters report (October 2020), the North East dominates the country in markets where life sciences are a growing industry. Several Northeastern markets make the top ten, including Boston-Cambridge, Washington, DC — Baltimore, New Jersey, Philadelphia and New York.
“These five markets form a supercluster, just under 400 miles from north to south, and linked by the country’s densest road and rail network. The entire region can be crossed by Amtrak’s Acela service in seven hours or by plane in 90 minutes, ”the CBRE report said. “Compared to the top ten life sciences markets in the country, the Northeast supercluster accounts for 72% of the existing life sciences inventory per square foot, 56% of the life sciences inventory in construction and 40% of laboratory conversions. “
The dominance of the Northeast supercluster is rooted in its history, with critical research in Greater Boston related to DNA and human genome sequencing, the legacy of the big pharmaceutical companies of New Jersey and New York and the DC region’s sustained investment in life sciences by the federal government, according to the report.
This has led to a large and extensive talent base that continues to attract new entrants, given the industry’s tendency to cluster in major markets. In addition to the abundance of talent, demand in the Northeast is driven by factors such as the region’s high-quality universities, infrastructure, and sufficient funding from the National Institutes of Health and private investors.
Here are other highlights from the CBRE report:
- Of the country’s top 100 universities, 27 are located in cities along the Acela Corridor with a combined enrollment of over 275,000 students.
- New Jersey, Massachusetts and Maryland are among the states with the most chemists, biochemists and biophysicists per 1,000 people nationwide.
- Boston – Cambridge, New York City, Philadelphia, and Washington, DC – Baltimore represent four of NIH’s top ten funding markets and received 65% of the combined funds in 2019.
- Boston – Cambridge, New York, New Jersey, Philadelphia and Washington, DC – Baltimore represent five of the top ten venture capital funding markets and received a total of 51% of funds in 2019.
Acela Corridor Life Sciences Hubs
Source: CBRE Location Intelligence, CBRE Research, Q4 2020.
Demand for specialized lab space continues to drive absorption and rental growth in Northeast markets, according to the CBRE report.
“As the market continues to mature, landlords who invest in the basic infrastructure required and provide large tenant improvement allowances to offset the high cost of building lab space are facing significant rent premiums. The report says. “Buildings with this infrastructure and these allowances can fetch NNN rents ranging from about $ 45 per square foot in suburban markets to over $ 100 per square foot in Boston and New York, where the vacancy is less than 10%. “
The life sciences supercluster that has matured along the Acela Corridor from Boston to Washington, DC is expected to experience a period of sustained growth, creating opportunities for companies looking to relocate or expand in the Northeast Corridor, according to the report.
“Thanks to the region’s relatively small size and strong connectivity, the benefits of a much larger life sciences labor market are available to companies no matter where they choose to locate in. the corridor, ”the report says.
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