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Dallas Area Poised As A Growing Hub For Life Sciences Industry

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Dallas-Fort Worth is among the life sciences hubs in the nation that are positioned for major growth, according to a new report from real estate services and investment firm CBRE.

According to the report, DFW is one of the emerging hotspots for the life sciences industry and has benefited from the sector’s momentum across the nation.

CBRE said that a number of indicators suggest robust expansion for the industry. For starters, venture-capital funding for U.S. life sciences companies saw an 86 percent increase for the year, ending in September, to the tune of $15.8 billion. And, life sciences lab space under construction in the sector’s five largest U.S. markets expanded to 6 million square feet last year, a 101 percent increase.

In its report, CBRE said it focused on the human life sciences industry, which consists of manufacturing, testing and research-and-development work in biotechnology, pharmaceuticals, and medical devices. The top established life sciences hubs were analyzed and ranked according to four main criteria for each market: the number of scientists in key industry categories, the industry funding for local life sciences companies, size and long-term growth of the life sciences workforce, and inventory of industry lab space.

Between 2014-2017, Dallas-Fort Worth was the seventh fastest growing life sciences market in the nation. With two biological science higher education programs ranked in the top 100, according to U.S. News & World Report, Dallas-Fort Worth is now ranked 11th for producing new life sciences talent.

There are also three hospitals in North Texas that are ranked in the top 100, the report said, that bolsters the relationship between medical research institutions and life sciences innovation.

“The DFW area is an attractive market for companies in the life sciences industry,” CBRE Vice Chairman Jeff Ellerman said in a statement. “There is an enormous amount of high-tech talent in the area, which helps support the cross pollination between tech and life sciences.”

That makes North Texas attractive for companies.

“When you combine the growing market with available talent, it becomes a no-brainer for large companies in the pharmaceutical and medical technology sectors to choose North Texas for their headquarters,” Ellerman said.

 

Source: Dallas Innovates

Report: The Demand Drivers For Life Sciences Commercial Real Estate

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The investment and employment levels in the life sciences sector of commercial real estate has significantly risen according to Cushman & Wakefield’s new report, Life Science: Great Promise & Rapid Growth.

With the rapid influx of venture capital as well as billions of dollars in funding from the National Institute of Health, the life sciences sector has grown nearly five times as fast as the economy since 2000, adding 85,000 jobs, with roughly 70% of that job growth in the past eight years.

A significant driver of this growth is an aging population with increased longevity. By 2030, there will be 73 million Americans aged 65 or older, equating to 20.6% of the population, compared with 40.5 million Americas in this cohort in 2010. Demand for health services will continue to soar as the population ages and the technology enabling life science will continue to lead to a greater supply of new products, which in turn results in historically high investments in this sector.

“Life sciences is generally the industry that includes pharmaceuticals, biotechnology, medical devices, agbio (food), biofuel and biochemicals (fuel and industrial chemicals via biological processes). As evidenced by Elon Musk and others, there will be another very complicated and converging era wherein tech and biology are merged to enhance human (and animal) mental and physical capabilities and function,” says Greg Bisconti, Executive Director and leader for the Americas Life Sciences Practice Group, Cushman & Wakefield.

According to the report, lab space vacancy is 8.4% the 11 (life-science heavy) U.S. markets, well below the national office vacancy rate of 13.3%. Across the U.S., the average lab space rent has increased 33.2% in the past decade, compared with a 17% increase for U.S. office space. In extreme cases like the Boston/Cambridge area, NNN asking rents hover around $88 per square foot (psf), a 70.4% increase over the past 10 years.

The look and layout of lab space varies widely from user to user but it is generally heavy on lab-to-office ratio (70/30) at the start-up stage. That lab ratio tends to go down as a company has a product and other office functions such as clinical (clerical side) and sales grows faster than the research and development (R&D) side. The science of any given company guides its needs from biology to chemistry to a mix.

There are many companies with no lab space at all and who might entirely outsource their R&D functions. On the other side, there are large pharmas that will have a large R&D operation that is 60-70% lab. Lily (300,000 square feet), Celgene (350,000 square feet) and Takeda (165,000 square feet), for example, follow these metrics, Bisconti tells GlobeSt.com.

These life science labs are typically located in a suburban setting at established life science hubs such as Cambridge in Boston, the San Francisco Peninsula and San Diego. New York City, however, is setting a new standard for a high-rise urban life sciences presence. Life sciences hubs share a few commonalities such as major universities, research institutes, access to capital and proximity to water (which probably speaks to the lifestyle and a quality-of-life of scientists).

The universities, of course, provides the brainpower. Research institutes have now added government funding to that brain power, which leads to developing intellectual property and innovation. These areas tend to have clusters of wealthy angels, venture capitalists, hedge funds plus conventional banks.

“Essentially the tech area of healthcare, life sciences has been, and will continue to be, a major growth driver for the U.S. economy for decades,” says Bisconti.

 

Source: GlobeSt.