Big Pharma Gets Smaller
As Big Pharma continues to contract and morph, perfect storm conditions prevail in the marketplace for R&D properties in New Jersey. So says Christopher E. Kinum, head of Cushman & Wakefield’s global life sciences practice. But he isn’t the only one—his industry colleagues provide similarly gloomy reports on the climate.
“Brokers who know the life sciences industry are all of the same general opinions,” says CBRE NJ’s Tom Sullivan, the national director for his company’s practice. “R&D property in any size has been depressed for four to six years, though not as depressed as it is right now. We’ve got some really major assets becoming available, and the fact is, the bigger the asset, the more difficult the challenge of ever repositioning it.”
Interviewed in the week after super-storm Sandy slammed the state with its destructive force, Kinum and Sullivan also spoke, of course, in the continued wake of roiling economics and “acquisition frenzy” (to quote Kinum) within the pharmaceutical industry. Three weeks before the Oct. 29 hurricane, Merck & Co. had announced it would close its longtime Whitehouse Station headquarters building to consolidate offices in Summit, where it had inherited a facility when it swallowed Schering-Plough in 2009. The Merck bombshell dropped only four months after Roche’s reverberating declaration that it would shutter its Nutley headquarters of 83 years and consolidate most R&D operations at its home in Switzerland.
Roche is “the third extremely large site in the area that’s now going to be either totally or partly vacated,” said Kinum. “Conservatively, that makes about five or six million square feet of expensive research/lab space available.” He was counting a Rockland County, NY property his company is currently marketing in that total: Pfizer’s 2.8 million-square-foot building in Pearl River, where the company plans to close all but one of its divisions by 2014, cutting 1,250 employees...
...For the rest of the story, go to the November 2012 issue of Real Estate Forum online.