Emeryville Is the Next Hot Life Science Market

Emeryville is set to become a leading life science hub in the nation. With proximity to San Francisco and Silicon Valley, which have a low vacancy rate of 5.7%, Emeryville is attracting biotech and life science companies looking for quality, available space. More than 150 biotech companies are already located in Emeryville, including Novartis, Bayer Healthcare, Amyris and Zymergen.

“Emeryville provides phenomenal access to talent, capital and research and development centers,” Darren Hollak, director at Newmark and an expert on the market, tells GlobeSt.com. “In particular, UC Berkeley has established itself as one of the leading centers for biotechnology and offers multiple incubator programs, which has fostered the group of more than 150 life science companies that call Emeryville home. Additionally, the rapid growth of innovators has created an ecosystem for new companies to flourish and grow.”

Demand is already exceeding supply. According to Newmark, the life science market has only 122,000 square feet of existing availability but 620,000 square feet of active tenant requirements. Plus, tenants like Bayer have announced plans to expand with a 1 million square foot R&D office campus for 1,000 employees. “Historically Emeryville has been controlled by local investors. With Emeryville now on the map as one of the fastest growing life science clusters in the United States, we are seeing a shift towards institutional capital entering the market including REITS, Pension Funds and Equity Funds,” adds Hollak.

This new influx of capital has also helped scale the market to accommodate larger users. San Francisco typically accommodates larger tenants, but Emeryville is now drawing tenants in need of a larger footprint. “We are seeing a shift in this as investors are delivering new construction and conversion space at scale, appealing to similar tenants as San Francisco,” says Hollak. “While there will definitely be increased competition for tenancy between Emeryville and San Francisco, Emeryville should continue to record strong growth given pro-development and pro-business policies.”

Over the next 12 months, construction activity will continue to support tenant expansion. “We expect to see continued growth of the market, through the delivery of new construction and conversion product, as well as tenant expansions,” says Hollak. “We also wouldn’t be surprised to see one of the new developments attract a new entrant of scale to the market.”