Race for COVID-19 Vaccine Boosts Real Estate in Life Sciences Hubs
Hubs across the nation are looking to use real estate to boost productivity as the growth of the global prescription drug market is expected to surpass $1 trillion by 2022.
Real estate is in high demand in the nation’s life sciences clusters, as companies race to develop a COVID-19 vaccine, and as more corporations look to take advantage of expiring pharmaceutical patents.
Hubs are looking to use real estate to boost productivity as the growth of the global prescription drug market is expected to surpass $1 trillion by 2022, according to the JLL 2020 US Life Sciences Outlook. The top three hubs are Boston, San Francisco and San Diego, capturing 70% of venture capital in 2019.
New York, Los Angeles, and Philadelphia each increased their scores in the ranking after hitting new levels of venture capital, and the race for a COVID-19 vaccine is expected to drive up demand in pharmaceutical-heavy New Jersey.
Raleigh-Durham, Houston, and Maryland also scored well due to their proximity to major research institutions.
“Each cluster has a different specialty and occupies its own point along the maturity spectrum, providing a diverse range of options for investors and occupiers alike,” said Roger Humphrey, executive managing director of JLL Life Sciences. “But they do share a major commonality. Each cluster features a highly-educated workforce and ties to the research community, which in turn attracts a steady stream of multi-sourced investment that creates a need for institutional real estate.”
Other drivers for growth in the hubs beyond COVID-19 research includes more millennials seeking to increase their earning potential, and the upcoming expiration of a suite of patents that will create an opportunity for mid-tier life sciences companies to pursue new profit sources, according to the report. Many new products are also curative instead of therapeutic, boosting the marketing potential.
“Conditions are ideal for maximum profitability arising from innovative new pharmaceuticals and medical devices,” said Audrey Symes, Research Director, JLL Healthcare and Life Sciences. “Meaningful advances within the life sciences industry, such as machine learning, are creating new sources of workflow and thus real estate demand. This combination of simulative factors sets up the life sciences industry to expand at an unprecedented pace, both in terms of manufacturing and patient demand.”