New Jersey is redeveloping outdated office buildings at a rapid pace according to JLL‘s latest New Jersey Life Sciences Industry Insight report.
With the Garden State being home to more than 300 biotechnology companies and 20 pharmaceutical and medical technology firms, demand from life sciences companies seeking modern workspaces, combined with an empty construction pipeline, is leading to new construction and redevelopment of outdated office buildings.
According to JLL’s findings, New Jersey remained a hub for the life sciences sector in 2021, with a large portion of this activity being fueled by growing pharmaceutical, biotechnology and generic drug companies.
The Princeton submarket has remained on the radar screen of life sciences companies, as it has an inventory of 2.5 million square feet and nearly 30% of New Jersey’s rentable lab space. This market was also active on the leasing front, as several transactions were signed during the second half of 2021.
Demand for modern lab space leading to new construction and redevelopment continued.
In late 2021, BeiGene acquired a 42-acre site at the Princeton West Innovation Campus from Lincoln Equities Group, where it plans to develop up to 400,000 square feet of biologic pharmaceutical manufacturing facilities, along with clinical research & development and office space. Construction on the initial phase is scheduled to start in 2022.
In Jersey City, Thor Equities Group signed the first deal at 95 Greene St., a repositioned 350,885-square-foot former office building, where RWJBarnabas Health took 11,000 square feet for a primary and urgent care center. In addition, Fork & Goode, a company that develops meat from cultured animal cells, leased 11,855 square feet at the building.
Owner-occupied life sciences campuses ripe for repositioning, as well as office and lab buildings, were on the radar screens of buyers during 2021.
In Summit, Bristol-Myers Squibb sold the 630,570-square foot 11-building Celgene campus at 86-90 Morris Ave. to Onyx Equities for $40 million. Celgene was acquired by Bristol-Myers Squibb in 2019, and still retains another campus in Summit.
Russo Development and Onyx Equities acquired 62 acres from Novartis at its sprawling 174-acre U.S. headquarters campus in East Hanover. The new owners will demolish 900,000 square feet of vacant office space, to make way for two new warehouses totaling 826,800 square feet.
In Bridgewater, AVG Partners purchased 55 Corporate Drive for $260.7 million. The 674,330-square-foot, three-building campus is leased to Sanofi through 2032 and represented one of the largest office sales in New Jersey during 2021.