These Cities Are Coming For The 'Big Three' Life Sciences Markets

Boston, San Francisco and San Diego continue to rank among the top three cities nationally for real estate investment in the life sciences sector, but growth in emerging markets like Raleigh-Durham, Los Angeles, and Washington DC are fueling serious competition.

Historically, investors in the sector targeted legacy markets where industry clusters are most long standing, and where a vast inventory of lab properties already exist. But as buyer competition heats up in those markets, development activity has begun to push to secondary cities, according to JLL.

“The life sciences industry has been investing in lab space and lab R&D for years, and new capital players continue to enter the space. Not only is venture capital fueling new company formation faster than ever before, new real estate capital players are battling for the best-located assets or development sites in hopes of tapping into this new wave of demand,” said Travis McCready, Executive Managing Director and National Markets Practice Leader, JLL Life Sciences. “Historically, however, infrastructure and innovation investment in advanced biomanufacturing has lagged, and that will be the next hurdle as more companies grow to scale and enter into clinical trials at an accelerated rate.”

Boston has enjoyed favored status for life science investment, but cities like Raleigh-Durham⁠—which comes in at #4 in JLL’s survey of life science clusters⁠—are becoming increasingly competitive thanks to strong research capabilities, workforce training, and lower costs.

The North Carolina city was followed by New York/New Jersey, Greater Washington DC, Los Angeles, Denver-Boulder, Philadelphia, and Seattle-Bellevue.

“Denver-Boulder is a new entrant to the top life sciences cluster list, driven by an extraordinary rise of lab development, venture investment, and start-up activity emerging out of Boulder,” the report notes.