Since mid-March, Colliers International said it has focused on five key areas of pandemic-related potential impacts to the Life Sciences Real Estate. Areas addressed include lab productivity, expansion plans, development of new facilities, supply chain, and more.
At a small level, Colliers said not much has changed since its initial report three months ago. The sector seemingly has recovered from the shock of COVID-19 and in response, has accelerated more quickly.
Companies that focused on COVID-related treatments, vaccines, testing and prevention saw increases in research and development activity, staffing, and demand for lab space, while at the same time utilizing measures, such as staggered shifts, to address any safety issues.
Personal Protective Equipment, or PPE, remains one of the top challenges due to a lack of product availability.
Finally, many non-COVID development initiatives have slowed because of delayed timelines for clinical trials.
Drug development companies that halted all non-critical activities and expansion plans in anticipation of COVID-19’s impact are bouncing back amid the new “normal” and focusing on developing therapies.
There’s been an increase in the need for lab space and new leases with an active pipeline of prospective companies. This is evident by Century Therapeutics full-floor lease in Philadelphia’s University City and Spark Therapeutics’ 120,000 square feet worth of leases in two locations near its headquarters.
Back in March, Colliers suggested that investment in life science would briefly decrease and then increase over time, resulting in a quick recovery. Since the end of May, more than $450 million has been raised in Philadelphia by five drug companies for non-COVID projects.
Since then, there’s been increases in inquiries from investors and developers to better understand the sector. In addition, there’s been an increase in the number of office building owners who are considering repositioning their spaces to short-term R&D lab space.
Supply chain vulnerability, fulfillment of patient prescriptions and PPE continues to be top of mind for industry and political leaders. Bills have been introduced to support and diversify the U.S. supply chain and encourage investment and development of domestic raw material, consumables and API manufacturing capacity. There’s also been an uptick in requests from CDMOs looking for new facilities on the East Coast in response to the growing demand for small scale manufacturing.