Big Picture Trends
- The U.S. life sciences industry continues to shatter records for employment, venture capital funding and laboratory/R&D space demand and pricing.
- Life sciences employment reached a record high in March 2021, driven by biotechnology and other industry advancements.
- The industry’s 16% total job growth since April 2017 when CBRE first produced this annual report has surpassed that of the technology sector.
- Venture capital funding to life sciences hit a new quarterly record of approximately $10 billion in Q1 2021, more than double the amount of Q1 2020. Funding to emerging markets also increased.
- The outlook for 2021 remains positive as the national economy rebounds and capital is plentiful for expansion.
Real Estate Trends
- Lab/R&D market fundamentals have never been stronger:
- Boston, the San Francisco Bay Area and San Diego remain the premier markets, experiencing the strongest demand and tightest space availabilities.
- Demand across all major markets has grown by 34% since mid-2020.
- The more than 15.6 million sq. ft. of speculative construction underway as of Q1 2021 is still not enough to meet current tenant requirements for space. Preleasing of this under-construction space increased to 29% in Q1 2021 from 22% in mid-2020.
- The prospect of oversupply from conversions of other property types to lab/R&D space has not materialized through early 2021.
- Rents continue to grow quickly, particularly in ascendant markets like Philadelphia and Washington, D.C.-Baltimore. New records were hit in Boston, San Francisco and San Diego.
- Development of Good Manufacturing Process (GMP)/Biomanufacturing space is growing, especially in East Coast markets, as this property subtype increases in prominence and importance.
Biotech Revolution Underpins Demand for Labs
U.S. Biotech R&D Employment
Source: US BLS, CBRE Research, Q2 2021.
Top U.S. Life Sciences Clusters
Q1 2021 Market Indicators
Source: Source: CBRE Research, Q1 2021.
Explore More Life Sciences Thought Leadership
A Day in the Life (Sciences): The Where and Why of the Bio-Boom
The Life Sciences industry is booming around the world. CBRE specialists Ian Anderson, Joanne Henderson and Steve Purpura join Spencer to analyze the growth of bio-tech clusters and what it means for real estate usage and investment.