Life Sciences Markets Poised For ‘Outsized’ Growth
Major medical research and development markets such as Boston and California’s Bay Area are poised for “outsized” gains as the life sciences industry grows, said CBRE, Los Angeles.
Other strong life science R&D markets include San Diego and Raleigh, N.C., CBRE said.
“When you look at the landscape of investment opportunities within the commercial real estate sector, few asset classes offer as compelling a case for near-term optimism as the life sciences industry,” said CBRE President of Advisory and Transaction Services Scott Marshall.
Marshall said the life sciences industry–including pharmaceuticals, biotechnology and medical-device manufacturing–is on a long-term expansion track due to an aging population, increases in public and private funding, job gains and robust lab and R&D space construction.
“Many solid trends support strong growth going forward for the life sciences sector, especially in major R&D markets,” said CBRE Research and Analysis Director Ian Anderson. “The market for lab space offers several secular growth drivers and constrained supply.”
JLL, Chicago, noted the need for collaboration and “agility” will require life sciences companies to adopt new approaches to their real estate and facilities strategies. For example, JLL Executive Managing Director Roger Humphrey said several trends are transforming how medical device companies manufacture their products–and thus how they make real estate and facilities decisions.
Humphrey predicted life science company mergers and acquisitions will continue “at a rapid pace” and said real estate will play a growing role in helping companies realize the full potential of an M&A strategy. “M&A, or partnering, is the path to success for many medical devices companies,” he said. “But a company has to get real estate to the table during M&A discussions if it wants to quickly execute its operating strategy following a transaction.”
In addition, more medical device companies will likely outsource non-core functions, including corporate real estate, Humphrey noted. “Outsourced corporate real estate management not only can reduce real estate and facilities costs, but also deliver agility,” he said. “A real estate service provider can help a medical device company quickly pivot to a new strategy and establish engaging workplaces and productive facilities based on real estate-specific data and insights.”
Finally, site location decisions will appeal to the next generation of talent, Humphrey said. “Some medical device companies are seeking locations in or near the heart of the life sciences hotbeds like San Francisco and Boston. These locations offer not only access to top research and data-analytics talent, but also to the urban lifestyle amenities that appeal to Millennials.”
