Life Sciences Report: A Constantly Evolving Industry

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Life Sciences in 2016: A constantly evolving industry

The United States life sciences sector is constantly changing and it is
impacting all aspects of the industry. The overall cost of operating is
rising due to increased lab rents in top-tier clusters, R&D costs and
higher wages for skilled employees.

JLL has researched and concluded that these are the four major industry themes in 2016:

#1: Strategic hunt for revenue growth
The United States saw M&A activity soar to a historic high in 2015, both
in terms of quantity of deals and aggregate deal volume. This can be
attributed in part to market-friendly dynamics.

JLL Life Sciences totalhealthcareno-1

#2: Influx of new sources of capital
Money is increasingly flowing to the life sciences sector and investors are
recognizing the value this creates for related real estate assets.


#3: Tight markets drive new real estate solutionsdev-byclusterno3Driven by fierce competition for space and labor,
tenants are putting more emphasis on the
importance of site selection and amenities,
which play a key role in attracting talent and capital.






#4: Prioritizing talent critical to growth
In today’s constantly evolving workforce, the ability to attract,develop and retain top talent is fundamentally important to company growth. Companies are recognizing what it takes to put themselves in a situation to hire and acquire skilled workers.

Looking forward to 2017, we have identified several rising trends that may
impact real estate decisions and strategy in life sciences clusters:

• Continued acquisition and consolidation activity will offer opportunities for small and mid-sized firms to secure space in
tightening primary clusters.
• The practice of business swaps will result in an increase in vacant
space in secondary markets and lead to the renovation of older
space to meet the needs of tenants.
• Life sciences tenants will continue to seek out affordable options in
top clusters, resulting in secondary submarkets emerging within
primary clusters, such as Boston’s Core Suburbs and the Bay Area’s
Mid-Peninsula, where a moderate number of space options and
development opportunities still remain.
• Advances in medicine and global demographic trends point to an
overall expansion of the life sciences industry. With demand still
outweighing supply, asking rents for lab space will continue to rise in
premier clusters.
• The second tier of clusters, such as Seattle, Philadelphia and
Westchester County, will exhibit more interest from developers as
institutional capital floods top markets, leading more established
companies to entertain the cost-savings benefits of rising markets.

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