Boom times continue for Boston metro area


In the annual beauty contest for best places to site new biopharma activity, the JLL 2021 Life Sciences Real Estate Outlook picks Greater Boston, the San Francisco Bay Area and San Diego as the top three sites for the coming year (see table). Raleigh-Durham has moved up a notch from 2020, and Maryland (now part of the Greater DC Mid-Atlantic) has dropped a couple notches, with a newly combined New York-New Jersey grouping now coming in at No. 5.

JLL bases its assessment on a compilation of several factors: availability of life sciences professionals, and their proportion relative to other types of local or regional employment; destinations of venture capital funding and government research grants; and volume of available or potential laboratory space. This analysis is skewed toward selecting the location of new startups or new business units; the logic is that the R&D centers will be close to both corporate headquarters and, preferably, close to where in-house or contract manufacturing can occur.

JLL cites the explosion in investment in life sciences over the past couple years; the firm notes that $38 billion in investment funding has been raised by the industry in the first half of 2021, “an increase of 77% from the first half of 2020 and well over the 10-year average of 18% annual growth.” Industry financial health will also be boosted by the rising volume of pharma sales (at least, unless Washington drug-pricing restrictions take hold); sales will tick upward by a compound annual rate of 7.4% through 2026—faster than the 2.9% growth of the previous six years.

JLL’s report also presents a few details on the prospect of converting office space to lab/R&D space—something that pharma companies might be thinking of, given the still-uncertain situation of work-from-home employees returning to their offices. Such conversions require 16-ft minimum floor-to-floor heights (to make space for both “above ceiling mechanical systems” and “below-slab plumbing,” among other factors. “Investors and developers considering this option will need to invest $135 to $400 per square foot depending on the geography and scope of conversion required.”



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