The life sciences sector in New York City is facing challenging times amid waning investor interest. According to a CBRE market report, leasing activity has dropped sharply, plunging 60 percent to just 30,000 square feet over the past three months.
Venture capital funding is also down significantly, with only $155.16 million invested in the city-a 45 percent decline from the previous quarter and 60 percent below the average for the past five years.
From an occupancy standpoint, things were a little bit more mixed. For example, the lab exclusive availability rate was up by 10 basis points to 26.3 percent from the fourth quarter, but down 740 basis points year-over-year. For occupancy-ready, built lab exclusive assets, the rate plunged 80 basis points from the previous 12 months to 9.7 percent. But quarter-over-quarter, the category spiked by 30 basis points.
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While CBRE did not cite the reasons for the struggles, a big one could be tied to the National Institutes of Health funding cuts. Notably, New York City is expected to be hit hard, with more than 100,000 square feet of life sciences space projected to be lost or delayed in the metro, according to a report from Savills.
Some other highlights in NYC's life sciences sector included lab-exclusive asking rents shooting up by seven percent year-over-year to $106.33 per square foot, but remaining the same from the previous quarter. Moreover, Lab requirements decreased by 17 percent from the fourth quarter and by 55 percent from a year ago, to 439,000 square feet.
Additionally, there was data on some of the top leases. The first spot went to Confidential in the first quarter, with its 14,235-square-foot deal. It was followed by Firmenich, Inc., which struck a deal for 6,414 square feet.
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