Multiple factors are propelling the U.S. life-science industry, and by extension the real estate that supports it, to strong growth, thereby positioning major research-and-development markets like New Jersey for attractive growth, according to a new report from CBRE.
While many U.S. industries are navigating fundamental disruption, the life-sciences industry – which includes pharmaceuticals, biotechnology and medical-device manufacturing – is on a long-term expansion track. CBRE’s report examines the generators of the industry’s sustained growth, including the aging U.S. population, increases in public and private funding, hefty job gains and robust construction of lab and R&D space.
“Many solid trends support strong growth going forward for the life-sciences sector, especially in major R&D markets,” said Ian Anderson, CBRE director of Research and Analysis and lead author of the report.
Central and Northern New Jersey are particularly well-positioned with a broad foundation of diverse biopharmaceutical companies. The market for lab space is divided among several submarkets including the combined Princeton Route 1 Cranbury Cluster and the I-78 corridor.
New Jersey has the fourth largest life sciences cluster in the country after the San Francisco-San Jose Bay Area, Los Angeles-Orange County and Boston-Cambridge. Recent analysis shows that each of these areas boasts strong growth supported by a local life sciences industry that is reinventing itself.
CBRE’s report outlines factors expanding the life-sciences market, including the nine-year gain in average life expectancy in the U.S. since the 1960s, rapid advances in life-sciences technology and increases in funding from the National Institutes of Health and venture-capital sources. For example, venture capital investment in the U.S. life-sciences industry now is 53 percent greater than 10 years ago.
New Jersey is one of the top 10 innovation hubs in the world. It employs over 120,000 highly educated life sciences workers (of which 65,000 are biopharma). It is the operating base for over 1,000 biopharma companies, with more than 1,000 drugs in development by those companies. In 2015-2017 alone, New Jersey-headquartered biopharma companies accounted for 29% of the drugs approved by the FDA.
“When you look at the landscape of investment opportunities within the commercial real estate sector, few asset classes offer as compelling a case for near-term optimism as the life-sciences industry,” said Scott Marshall, CBRE president of Advisory & Transaction Services | Investor Leasing.
CBRE’s analysis found that regions with high concentrations of research and development jobs also saw the highest growth in their overall life-sciences job bases in the past 15 years. That indicates continued strong growth for leading R&D markets such as Boston, the San Francisco Bay Area, San Diego, New Jersey and Raleigh, N.C.
“With its unique combination of biopharma manufacturing and drug development R&D, New Jersey is now poised for renewed growth over the next 5-10 years” said Tom Sullivan, senior vice president, CBRE Life Sciences Group.
According to the January 2018-BioNJ report, “The New Jersey BioPharma Industry: A Prescription for Growth” the following factors will help propel the industry in the coming years:
- Direct state government support of the industry, including targeted financial incentives, tax credits, and funding private-public and academic-commercial partnerships.
- Promotion of life science innovation and investment in the state, including creating a new “BioPharma Super Cluster” as a hub of life science activity, most likely in North-Central NJ.
- Making NJ the world leader in post-graduate and mid-career BioPharma educational and training programs that focus on retraining for manufacturing and R&D jobs that will be critical for the next decade and are in critically short supply (e.g., advanced drug analytics; translational research; commercialization).
- Strengthening New Jersey’s brand, including increased promotion and marketing of the advantages of founding a company in New Jersey or moving a company to the state.