JLL recently released its Q2 New Jersey Life Science update, noting that flight-to-quality migration will continue to drive life sciences workspace requirements. The data suggests that, while life sciences companies generated nearly 30% of New Jersey’s leasing velocity during the first half of 2023, demand had since decelerated one year later. Approximately 22% of leases involved life sciences companies during the first six months of this year, which lagged the 28% of activity registered by the banking/financial services sector.
Among the notable deals signed during the second quarter was Empower Clinic Services’ leasing of 170,265 square feet at 203 Windsor Center Drive in East Windsor for its pharmaceutical manufacturing operations. Empower will occupy a portion of the building owned by Aurobindo Pharmaceuticals. In addition, Galapagos leased 15,750 square feet of office space at 650 College Road E. in Princeton.
In midyear, BeiGene opened its new $800 million, 470,000-square-foot flagship biologic pharmaceutical and manufacturing facility at the Princeton West Innovation Campus @ Hopewell. In New Brunswick, construction continues on the first phase of the HELIX (New Jersey Health + Life Sciences Exchange) project, which involves a 12-story, 574,000-square-foot building that will house tenants including Rutgers University, Hackensack Meridian Health and RWJBarnabas Health.
Having recently broken ground on a 100,000-square-foot Science and Innovation Lab at the Summit East campus, where it also leases a 191,450-square-foot office building for its global headquarters, Johnson & Johnson consumer health spinoff Kenvue announced plans to close its Neutrogena office in Los Angeles and consolidate operations to New Jersey.
Flight-to-quality migration will continue to drive life sciences workspace requirements, as tenants vacate outdated workspaces and move into buildings offering premium amenities. Meanwhile, limited quality space opportunities may encourage landlords to construct fully built lab suites within their portfolios.
Thor Equities had developed such workspaces at 95 Greene St. in Jersey City. Startup and smaller-sized life sciences companies seeking less than 5,000 square feet of research & development/lab space remain active in the market and are expected to drive future leasing velocity.
