Funding cuts to the National Institutes of Health (NIH) could impact the demand for life sciences facilities. A proposed 15% cap on indirect costs would reduce funding for facilities and administrative expenses and could cause research institutions to scale back and startups to shut down or slow operations, according to Savills Research and Data Services' U.S. life sciences market overview for the first quarter.
Ultimately, resources for occupancy needs at research institutions and universities could decrease, the report said. New York State is a top recipient of NIH funding and is expected to lose about $880 million due to announced federal cuts. In New York City, federal funding cuts have caused more than 100,000 square feet of life sciences space to be lost or delayed, although demand for spaces smaller than 15,000 square feet remains strong.
Meanwhile, drug pricing and access challenges are driving companies to invest in research and development and acquisition in an attempt to lower costs and improve consumer access, said Savills. The report noted that an example is AstraZeneca’s $425 million purchase of EsoBiotic to expand its cell therapy portfolios and improve treatment affordability.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
