The life sciences industry is booming. People who work in this field used to be relegated to spending their days in boring labs, which were often housed in nondescript strip malls or maybe in the basement of buildings. Because life sciences deals with biochemistry, microbiology, bioengineering, and therapeutics, people have become very interested in this field lately after a certain pandemic (COVID-19) hit the scene.
I always say there were definite winners and losers post-pandemic, and the life sciences industry was one of the winners, as this industry is responsible (among other things) for creating vaccines. Let's find out the type of office space this industry is now commanding.
The life sciences industry
In 2020, investments in the life sciences industry totaled $70 billion. Real estate investment firm Cushman & Wakefield predicts investments in this industry will hit the $90 billion mark for 2021. One outcome of all this investment money will be new construction to house life science firms, since the demand for labs has exceeded supply.
There's a need for specialized life science space, research and development space, office buildings, advanced manufacturing spaces, and medical testing facilities. A report by commercial real estate platform Newmark found there should be more than 36 million square feet of new construction in 14 top U.S. life science markets this year.
Established life sciences markets
The San Francisco Bay Area is currently America's largest, most established market for life sciences. But new life science areas are emerging. The top 14 markets, according to Newmark, are the following (in alphabetical order):
- Austin, Texas
- Los Angeles/Orange County
- New York City
- New Jersey
- Raleigh/Durham, North Carolina
- San Diego
- San Francisco Bay Area
This is by all means not an exhaustive list, as life sciences facilities are springing up wherever conditions are suitable.
What makes a good potential life sciences area?
According to the Newmark report, ideally life science buildings will be low, wide buildings in flexible zoning areas. These buildings should have tall ceilings (13' to 15') and high floor load requirements in the case of a wet lab, and there needs to be enough space for hazardous waste storage. Facilities should be near a highway for truck access, other biotechnology or pharmaceutical firms, and a research university with STEM students or a medical system.
What life sciences spaces will be like
In one interesting Pittsburgh development, an old Ford Motor plant where Model T cars were manufactured is being repurposed into a life sciences complex, complete with an open-air atrium. Other new developments in repurposed spaces will include balconies, views, and unique outdoor space. Not bad for a lab.
For new construction, mixed-use facilities will be popular. Expect to see lab buildings with retail and amenities on the bottom floor that serve the surrounding population as well as life science workers. These new life sciences buildings will often serve as anchors for an urban center, some even offering the trifecta of residential, office, and retail (live-work-play). People who work in this industry are often recent college grads who prefer to work in an inspirational setting that's conducive to innovation and collaboration, not in some run-of-the-mill strip mall box.
The Millionacres bottom line
The coronavirus pandemic pushed an already growing industry up even further, to exciting new levels. The danger for future pandemics is here (not to mention the emerging delta variant), and the U.S. needs to be prepared. Life science buildings are hot investment opportunities now and should continue to be so for a while, at least until the supply of life science space has been met.