Life Science Investment Picks Up in OC

Life Science companies in Orange County are rapidly expanding. In 2018, Orange County life science and tech companies raised $1.5 billion in funding, according to a report from JLL, and electronic health record and medical device companies led the market. The biggest deals included NextGen Healthcare, which raised $300 million, UST Global with $250 million, Rocket Lab with $140 million, and Cylance with $120 million.

“Orange County has regularly shown up in the rankings of top regions in the country for Investment in tech and life sciences growth,” Jason Lantgen, VP at JLL, tells GlobeSt.com. “The innovation has fueled the local markets here over the last 5-6 years out of the downturn specifically.  The industries that were lost during that period have been replaced.  JLL’s data has continued to suggest Orange County and the greater area has more patents issued than other parts of the country.  The fact that money is being invested here just validates that.”

San Diego and Los Angeles have been considered the tech and life science hubs of Southern California, with San Diego dominating in life sciences—some reports rank it as one of the largest life science markets in the country—and Los Angeles has a prominent tech market. However, Lantgen says that Orange County’s life science and tech market is on par with its northern and southern neighbors. “I disagree with the notion Los Angeles and San Diego have more established life sciences and tech markets,” he says. “That’s a big generalization and I’m not sure where that is derived from. The neighboring counties have specific strengths and competencies, while Orange County has its own as well.  For a variety of reasons, there are tech and life sciences companies that I wouldn’t recommend go to L.A. or San Diego, and the other way around.”

In total, life sciences raked in $621.4 million in 2018 and the tech industry brought in $915.7 million. This activity drove massive gains in office leasing. In 2018, there was 1.7 million square feet in leasing activity for leases 25,000 square feet and greater. Life science companies were responsible for half of the activity. “It’s really being shown in the later stage companies that have revenue and are ramping up operations,” says Lantgen. “The investment is directly leading to jobs being placed here in Orange County.

This year, these industries will likely continue to expand in Orange County. “We work with a number of companies that are going through the funding rounds and looking to manage flexibility while scaling,” says Lantgen. “There continues to be quite a bit of optimism based upon these requirements coming up in the future.”