The real estate demands around New Jersey’s life sciences community have grown as a result of the COVID-19 pandemic, CBRE said in its latest life sciences report.
The pandemic obviously has accelerated momentum in the U.S. life sciences industry, particularly amid the race to produce a COVID-19 vaccine and develop other medicines.
New Jersey, which boasts the nation’s most widely dispersed life sciences market, at 1,500 square miles, has played a significant role in the life sciences industry, and has been rapidly adapting to an increased focus on biologics and biomanufacturing, the report said.
According to the report from CBRE, 27 of the 42 companies that had applications approved by the FDA for new molecular drugs in 2019 have a presence in the state. Moreover, the biopharmaceutical industry contributes $83.4 billion to the state’s total economic output each year.
Looking closer at several New Jersey submarkets demonstrates how the state continues to lead the way in the sector.
The Princeton submarket, for example, is one of the most desirable life sciences locations in the nation. Since 2017, leasing activity in this submarket has been driven by biotechnology firms with small space requirements and has concentrated in the office parks that line Route 1.
Major international companies like Bristol-Myers Squibb and Solvay have also expanded in the area. As a result, net effective lab rent of $26.42 per square foot has climbed 7.1% since 2017.
In addition to Princeton, the Interstate 287 and 78 corridors in central New Jersey are home to several of the world’s premier pharmaceutical companies. This submarket’s central location and network of highways give employers unparalleled access to the state’s sprawling labor market.
As a result, this area has seen 29 new leases signed since 2017, with a dozen by foreign companies. The submarket’s net effective lab rent of $24.88 per square foot is 20.7% higher than what the market recorded in 2017.
This growth, the report said, started before the pandemic arrived in the state in March.
Employment in testing and diagnostic laboratories has climbed 27% since 2001 — a sure sign that the market remains as productive as ever when it comes to evaluating new drugs and therapies.
Tom Sullivan, a senior vice president with CBRE’s central New Jersey office, said the state has benefited in a number of ways.
“In addition to housing some of the most modern lab space in the country, New Jersey has drawn stable venture capital investment to the life sciences sector, totaling some $224 million for the year ending Q2 2020, with international companies remaining extremely active.”
The report cites the presence of Princeton University, the top nationally ranked university for biological, biomedical and biomedical engineering degrees, as well as Rutgers University and Stevens Institute of Technology, which also have strong programs.
Several other metrics support New Jersey’s position as one of the country’s largest life sciences markets, including having the nation’s third-largest inventory of top-quality laboratory space.
To read the full report, click here.
