JLL: More than one-third of leases signed thru mid-2022 involved life sciences companies

Life sciences companies were active in the pursuit of Class A office space, research & development/lab and manufacturing facilities through mid-2022 — that’s according to a new report from JLL that was released Monday.

The latest figures show that more than one-third of leases signed in New Jersey during the first half of the year involved life sciences companies, which was the highest proportion among the various business sectors. Cell therapy and biomanufacturing tenants remain in expansion mode, while growing biotech companies are tapping the pool of skilled employees available following consolidations among the larger pharmaceutical players.

Looking ahead, JLL’s report finds that accelerating demand from life sciences companies seeking modern, amenity-rich workspaces will foster the conversion of outdated office buildings with lab favorable infrastructures.

Several notable transactions through mid-2022 are of importance. The largest deal in the state involved PTC Therapeutics relocating its headquarters from South Plainfield and leasing 360,000 square feet at 400 and 500 Warren Corporate Center Drive in Warren. The two buildings will house PTC Therapeutics’ office, collaboration and conference spaces, as well as research laboratories.

Additionally, vitro-diagnostics test manufacturer Access Bio leased 152,740 square feet at 7 Fitzgerald Ave. in Monroe Township and South San Francisco, California-based Cellares also leased a 118,210-square-foot building at 95 Corporate Drive in Bridgewater for its cell therapy manufacturing operations, while Gilead Sciences took 96,300 square feet at Latitude West in Parsippany for its new East Coast hub.

While restructurings and relocations by life sciences companies unleashed more than 445,000 square feet of sublease space onto the office market during the first half of 2021, less than 150,000 square feet was placed on the market during the same timeframe one year later. The largest block added in 2022 consisted of 94,500 square feet from Teva Pharmaceuticals at 400 Interpace Parkway – Building D in Parsippany, while Kyowa Kirin began marketing 27,690 square feet for sublease at 135 Route 202/206 in Bedminster. In addition, Sanofi withdrew 233,250 square feet formerly available for sublease at 55 Corporate Drive – Building A in Bridgewater. Approximately 436,750 square feet continued to be marketed at Buildings B and C, which represented the largest sublease availability in the Route 78 submarket.

Demand for modern lab space is fostering new construction and redevelopment projects in the Garden State. After acquiring a 42-acre site at the Princeton West Innovation Campus in Hopewell last November, BeiGene broke ground on the first phase of a 400,000-square-foot biologic pharmaceutical and manufacturing facility in April 2022. In addition, Onyx
Equities announced two potential redevelopment plans for the former Celgene campus at 86-90 Morris Ave. in Summit, which was bought from Bristol-Myers Squibb. Celgene was acquired by Bristol-Myers Squibb in 2019. Now branded Summit East, two high-end office buildings are being marketed at the complex, with concepts calling for either razing nine
other buildings to maximize green recreational space, or redeveloping the buildings into one customized 190,000-square-foot office property.