Statistics show that life sciences are where it's at, and in New York City, leasing activity for lab space experienced an 85% year-over-year increase. There's also no shortage of venture capital funding for life science companies in New York.
Commercial real estate services and investing firm CBRE recently published a New York City Life Sciences Market Statistics Report that tells the state of the life sciences market in the Big Apple for the first half of 2021. Here are some highlights.
In the first half of 2021, NYC had about 1.9 million square feet of lab space, which is expected to grow to 4.32 million square feet in the next four years. Supply is low, though, as there was no occupancy-ready prebuilt lab space available. (Lab space includes incubators, step-out space, and independent labs.)
Plans that address low supply include the following:
- Deerfield Management is redeveloping almost 300,000 square feet at Cure, with the goal of making the facility a leading life sciences hub.
- Taconic Investment Partners and Silverstein Properties are redeveloping about 125,000 square feet of lab space at the Hudson Research Center.
- Taconic Partners and Nuveen are redeveloping 125 West End Avenue into a 400,000-square-foot life sciences campus.
- Construction is underway by the Janus Property Co. and J.P. Morgan Asset Management on the Taystee Lab Building in Harlem, where there will be 321,000 square feet of lab space.
- Alexandria, GFP Real Estate, and King Street Properties are redeveloping over 450,000 square feet of lab space in Queens.
Rent for Manhattan lab-exclusive space increased by 6% from the first half of 2020 to the first half of 2021. NYC leasing activity in the first half of 2021 has more than doubled from 2020's full year.
Demand for NYC lab space has grown a whopping 85% in the first half of 2021 from last year. Tenants are becoming larger and more institutional-grade.
Venture capital (VC) funding
There's been $645 million in VC funding in 16 NYC deals in just the first half of 2021, which includes both repeat and brand-new recipients, such as AffaMed Therapeutics, HiberCell, Immunai, and Volastra Therapeutics.
National Institutes of Health (NIH) funding
NIH funding totaled $1.57 billion, which went to 2,800 NYC recipients from January to July 2021. More than half of those funds went to three places: Columbia University Health Sciences, New York University School of Medicine, and the Icahn School of Medicine at Mount Sinai.
As of the end of 2020, there were over 15,100 NYC jobs in life sciences. From 2010 to 2020, NYC's private employment growth rate overall was 1.2%, while life sciences employment has grown 3.6%. While research and development is the largest subsector, at over 50% of the jobs, the strongest growth since 2010 has been in medical/diagnostic labs and testing labs.
The Millionacres bottom line
Life sciences encompasses biochemistry, bioengineering, microbiology, and therapeutics, so in a post-pandemic world, demand is great for this field, another COVID-19 winner. This CBRE report focuses only on New York City, which isn't even the top real estate market for this industry. That distinction goes to Boston, the San Francisco Bay Area, and San Diego. With the rise of life sciences labs, the hope is the United States can be better prepared to deal with possible future health crises.