Life Sciences Look Beyond Boston, San Diego

Boston and San Diego are not the only hubs for life science investments. Increasingly, secondary markets are appealing to both established companies and start ups in this space and are finding success in Phoenix, Denver, Seattle, Philadelphia, Atlanta, and parts of Florida.

Tenants are focusing on precise selection criteria based on labor and geographic synergies, JP Bacariza, Vice President and Southeast Market Leader, for Ryan Companies, tells GlobeSt.com.

“The labor requirements of life sciences users and tenants draw them to areas where they already have existing operations or are adjacent to competing organizations where they can take advantage of the abundant labor force.”

Geographically speaking, “Adjacency to universities provides users the ability to research, collaborate, and recruit from local educational institutions [is key],” Bacariza said. “Highly specialized research centers continue to provide attractive land options to create synergy among the tenants and users in each space.”

Lake Nona’s medical focus and Speros’s oncology research campus in Pasco are examples of communities focused on the life sciences market, he said.

“Unique infrastructure provides specific site selection criteria for different types of users. Power (both capacity and price), chilled water, and Internet fiber requirements are the most common types of selection criteria we see here.”

A good example of this, he said, is IFF, who chose to create their Citrus Innovation Center in Lakeland, Fla., a market where they are already operating.

“There was a pool of existing talent in the area, where they could work with Florida Poly to create programs around their research and had campus infrastructure to support their new building.”

While certain markets will always be strongholds for life science activity, these companies are also on the lookout for areas that have potential for growth in order to be on the ground floor of the ‘next Cambridge,’ says Corey Hennings Vice President, Life Sciences Regional Lead, Cumming Group.

Markets he feels strongly about based on factors such as NIH funding, VC interest, access to talent, local universities, and livability, such as Denver, Seattle, Philadelphia, and Atlanta.

The development of cGMP production space and specialty spaces like vivarium also presents an opportunity, according to Hennings.

This space could be focused on traditional pharmaceuticals, biologics, or cell therapy-based therapeutics, he said.

“The need for onshore production was felt during the pandemic and will remain a need for years to come as new treatments come online and the need to scale up,” Hennings said.

“Being able to produce in state-of-the-art facilities onshore will be key to meeting consumer demand. As these production and vivarium spaces typically require more room than typical lab-based activities, areas with more open land and lower labor costs become targets for development – think Raleigh, NC, Upstate New York, areas of Pennsylvania, and the Midwest are ripe for this type of specialized development.”

Matt Zaccardi, Senior Vice President at Commercial Properties, Inc./CORFAC International, tells GlobeSt.com that the Phoenix metropolitan area has attracted several life science-related company startups and established companies as it continues to offer an attractive employee base.

“It has realized 60 percent growth since 2008 in the bioscience health care workforce and is one of the leading emerging life science markets in the country,” he said.

“This growth has allowed local start-ups ElectraTect, KAKnostics, and Reference Medicine to have opportunities through the collaboration of a like-minded community. With additional venture capitalists coming to the market, it is forecasted to continue to realize growth in the life science sector.”