Biomanufacturing is an Emerging Growth Spot Within Life Sciences

The life sciences industry was growing before 2019. Then COVID hit, and things took off. 

Within the space, a relatively immature sector called biomanufacturing is exploding today, according to Spencer Levy, chairman of Americas Research for CBRE and senior economic advisor for CBRE on the company’s Weekly Take podcast. Biomanufacturing uses biological systems to construct commercially-relevant biomaterials to add to medicine, industrial applications and the food and beverage industry.

“The [number of] companies that actually have approved gene therapeutics, earlier this year was less than 10,” says Steve Purpura, vice chairman of the Boston Consulting Team for CBRE, also a participant on the podcast.  “So there are less than 10 of these companies that have shifted into an actual manufacturing stage of their therapies. And so we’ve seen a significant uptick in demand for this new type of space. It’s all-new, and it’s so important.”

Purpura says demand for biomanufacturing space should increase in core markets, not in greenfields in the middle of the country.

These biomanufacturing facilities “need to be close to where the research is happening in California, in Boston and beyond,” Purpura says. 

Historically, The Research Triangle in North Carolina has been a hub for research facilities. But Purpura is also starting to see activity in Philadelphia, New Jersey and parts of Europe. “It’s a kind of the next shoe to drop on the real estate side of life science,” he says.

Biomanufacturing is different from generic drug manufacturing, which usually occurs in China, Israel and other locations. But that could soon be coming to places like Texas in the US, especially after COVID showed.

“We certainly expect to see some demand for that type of space,” Purpura says. “I don’t think that’s going to be in the Bostons of the world, but that very well might be in the US.”

As the race to develop a COVID vaccine heats up, growth in the life science market should accelerate. The life science industry has reached record numbers in research and development, employment and venture capital investment. 

While employment was down 1.3% in July from its previous peak in March, employment in the sector has grown 1% year over year. Venture capital spending in life science industries has also fueled the recent surge of market growth. Annual life science venture capital spending through the second quarter of 2020 hit $17.8 billion, which is a record.

As life science investment increases, cities like Boston, San Francisco, San Diego, Pittsburgh and Austin stand to benefit, according to recent research from CBRE.