Demand For Life Sciences Space Continues to Boom

Boston, San Francisco, New York, and San Diego rank as the top life sciences markets in the US, according to a new Yardi CommercialEdge report, which weighed the amount of space devoted to the asset class, the pipeline, and the potential local hiring pool.

Given advances in medical research and technology, life sciences industries are experiencing demand “like never before,” CommercialEdge said, and “they also fuel the necessity for well-educated R&D talent, world-class facilities, and a supportive economy.”

Looking at 2018 through 2022, half of the markets in the Yardi CommercialEdge research saw double-digit percentage growth in the number of local life sciences establishments during the five years.

By the start of 2023, the number of life sciences establishments had exceeded 1,000 in more than 30 of the metropolitan areas included.

Nationally, life sciences space accounted for more than 1% of the office market in 30 metropolitan areas, with Durham, NC; and San Diego filling significantly more.

Growth in the sector is expected to continue as 28 metropolitan areas were home to life sciences developments in the planned or under-construction stages at the close of 2023.

The top 10 markets are mostly on either coast, but looking beyond the top 10, all regions are well represented.

Boston claimed the top spot with about 10% of the local office market and also sat comfortably in front when it comes to its pipeline.

San Francisco ranked next with life sciences accounting for nearly 8% of office space – no small feat given that the metro is one of the largest office markets in the country.

New York followed and led the country in educational attainment. It has the highest number of learning institutions offering biological and biomedical sciences programs or majors (70). New York also is home to the largest number of residents aged 25 or older holding at least a bachelor’s degree in related fields (nearly 3 million).

San Diego ranked as the fourth-best, accounting for nearly 11% of office space – the second-best score for the share of the market. San Diego is home to the third-largest life sciences real estate pipeline among the metros studied.

Washington, DC; Seattle, Los Angeles, Philadelphia, Durham, and Chicago round out the top 10, respectively.