Despite macroeconomic headwinds, life sciences companies were active in their pursuit of Class A office, research & development/lab and manufacturing facilities in New Jersey through mid-2023, according to JLL, which recently released its Q2 Life Science report.
JLL said that, with NEST in Kenilworth and HELIX in New Brunswick seeing tenant interest from startup biotechs expanding from incubators, as well as established companies looking for existing quality space opportunities, demand is expected to persist during the second half of the year, as well.
Furthermore, JLL said economic development organizations like Choose New Jersey and the New Jersey Economic Development Authority are helping to grow the state’s life sciences sector, while collaborative efforts between universities, community colleges and the private sector are providing opportunities for research, innovation and talent development.
More than 35% of leases signed in New Jersey during the first half of 2023 involved life sciences companies, which was the largest volume of activity among the various business sectors. Furthermore, life sciences companies were responsible for inking the largest deals during each of the past two quarters. After Sanofi signed a 260,000-square-foot lease at M
Station West in Morristown during Q1, Kenvue’s leasing of a 191,450-square-foot newly renovated office building at the Summit East campus for its global headquarters was the largest deal of Q2. The Johnson & Johnson consumer health spinoff will also occupy a 100,000-square-foot R&D building to be constructed on the campus. In addition, Enzene
Biosciences leased 55,920 square feet for a new manufacturing plant at the Princeton West
Innovation Campus at Hopewell. This represents the global biotech company’s first location outside its home country of India.
Consolidations and relocations by life sciences companies led to additional sublease availabilities being placed on the office market during the first half of 2023. The largest block added in Q2 consisted of 78,480 square feet from LEO Pharma at 7 Giralda Farms in
Madison. This was in addition to 154,440-sqare feet placed on the market by AbbVie at 5 Giralda Farms earlier this year. AbbVie had relocated its operations into 92,440 square feet at 100 Park Ave in Florham Park.
While construction continues on BeiGene’s new 470,000-square-foot biologic pharmaceutical and manufacturing facility at the Princeton West Innovation Campus in Hopewell, persistent demand for modern lab and manufacturing facilities has encouraged developers to unveil additional endeavors. Lincoln Equities Group and H.I.G. Realty recently announced plans for three new planned specialty manufacturing buildings, totaling 380,000 square feet at the Princeton West Innovation Campus.
In addition, SJP Properties and New Brunswick Development Corp. are looking to develop the second phase of the HELIX (or New Jersey Health + Life Sciences Exchange) in New Brunswick. Known as H-2, the project includes up to 600,000 square feet of build-to-suit lab and office space at the mixed-use campus. Construction is currently underway on HELIX’s first phase, which consists of a 574,000-square-foot building that will house tenants including Rutgers University, Hackensack Meridian Health and RWJ Barnabas Health.
After acquiring the nearly 2 million-square-foot former Merck & Co. campus in Kenilworth earlier this year, the joint venture of Onyx Equities and Machine Investment
Group recently announced its plans for the site. Rebranded as the Northeast Science and
Technology Center, or NEST, the 108-acre campus is being repositioned to growing pharma, biotech and technology companies pursuing existing office and lab spaces, as well as new ground-up facilities. NEST will also offer state-of-the-art amenities, including full-service cafeteria, fitness center, auditorium, conference center, heliport, parking garages and
shuttle service to local transit centers/downtowns.