While the life sciences industry is seeing a drop in demand for both lab space and talent, Greater Boston remains cluster in the industry in the United States based on its access to talent, funding and real estate, according to a study by JLL Research.
According to the study, the life sciences industry saw a boom during the COVID-19 pandemic, with $10 billion to $13 billion in investment per-quarter across the country, compared to the usual $5 billion to $6 billion.
However, in mid-2022, that investment began to slow, leading many companies to seek additional funding or cut back on jobs or space to reduce costs, with investment in the last year at about the same level as 2018 or 2019.
While the demand for lab space across the country has fallen from 25.3 million square feet in the fourth quarter of 2021 to just 10.1 million in the second quarter of 2023, Boston and the San Francisco Bay Area are still at the top in terms of lab demand. Of the 37 million square feet of lab space currently under development around the country, 63% is in those two cities.
Most of that demand is coming from smaller tenants, with 82% of deals signed in the first half of 2023 amounting to 30,000 square feet or less.
The study also looked at submarkets for lab space, and found that East Cambridge and Boston’s Seaport neighborhood were in the top five submarkets, “owing to their global biopharma HQ base, heavy concentration of experienced sponsors and prime location.”
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Boston also has the highest percentage of job openings in the industry at 13%. The next-highest metro area is New York City with 11%, followed by San Francisco with 6%.
The researchers also studied the top medtech and biomanufacturing markets, two sub-categories of the life sciences industry. In each of these categories, the Boston area ranked in the top five markets.
The area was home to 40,433 medtech manufacturing and 17,830 biomanufacturing jobs in 2022. In addition, in the biomanufacturing field, Greater Boston had 136 companies conducting phase two or three clinical trials between June 2022 and June 2023, the highest in the country.
You can read the full study here.
