Cushman & Wakefield‘s New Jersey Life Sciences Overview for 2021 was just released and has some interesting findings, including new all-time high rents per square foot and deal volume rising 9.7% year-over-year.
Life sciences companies of all sizes continued to make New Jersey their home in 2021, a trend that has not wavered for quite some time. The highly educated talent pool
continues to motivate companies to expand within the state, along with a dynamic
innovation ecosystem with top-rated research universities and a persistent pipeline of biotech startups.
As demand for lab space has remained robust over the last three years, the vacancy rate within lab and research & development product has dwindled, down 200 basis points to 11.9%. The bulk of the vacancies are concentrated in handful of buildings, including the newly available 95 Greene St. in Jersey City (being renovated into lab space) and the former Bristol-Myers Squibb campus in Hopewell.
With the market tightening amid healthy activity, asking rents for life sciences space have risen markedly over the last two years. Compared with year-end 2020, the average net asking rental rate has swelled by 12.2%, to a new all-time high of $33.61 per square foot.
The industry remains one of the driving forces for the New Jersey office leasing market, with more than 1.1 million square feet of deals inked throughout 2021, accounting for 11.8% of the total. Seven office deals greater than 30,000 square feet were completed in that time.
While the Interstate 78 Corridor, Morris County and Greater Princeton remained at the forefront as clusters for life sciences companies, the Upper 287 Corridor recorded healthy demand totals in both office and lab space in 2021. Total life sciences demand (office and lab space) has been stout since the start of 2018 with more than 6.7 million square feet of transactions completed. Year-over-year, total life sciences deal volume has risen by 9.7%.