Venture capital investment in Massachusetts' life sciences industry is spreading to cities and towns outside of the traditional Cambridge hub, a new report found, creating more opportunity for real estate growth in the suburbs.

Of the $8.7B in venture capital funding to biopharma companies in the state last year, 51% went to companies outside of Cambridge, up from 42% in 2021, according to MassBio's 2022 Massachusetts Biopharma Funding Report.

Twelve municipalities outside of Cambridge received at least 1% of the state's total VC funding in 2022, up from six the prior year.

While investment was more spread out last year, it was also down significantly from the 2021 total of $13.6B. But last year's $8.7B was still the second-highest total ever, MassBio said.

“Massachusetts remains in a position of strength to receive continued, meaningful investment, but the implementation of the Inflation Reduction Act, coupled with the fewest U.S. FDA approvals in years, will give investors new reasons for pause,” MassBio CEO Kendalle Burlin O’Connell said in a press release.

The suburban companies that landed the largest funding rounds included Waltham's Upstream Bio, which received $200M in Series A funding, and Bedford's Frontera Therapeutics received $160M in Series B funding.

Frontera Therapeutics has an office at One Patriots Park, a 143K SF, 100% leased life sciences building in Bedford. In June, the building was sold to Barings for $132M. Upstream Bio is located at 460 Totten Pond Road in Waltham, one building in a three-building office park that was last sold to Northwood Investors for $51.5M in 2017.

There has been steady interest in communities outside of Cambridge as rents in the city have skyrocketed and land has become less available. More companies have been looking out to communities like Bedford, Waltham and Watertown to find a home and expand.

Not only have companies been looking for more opportunities, the towns and cities hosting them have taken the necessary steps to be able to attract more life sciences. MassBio created the BioReady Communities list as a way to rank communities in the state based on how prepared they are to host these companies.

Life sciences experts will discuss the latest trends in the market at Bisnow's Boston Life Sciences Real Estate Conference, March 28 at 33-41 Farnsworth.