5 Cities Emerging As Future Hubs For Life Sciences Development
The current boom in life sciences development mirrors the tech industry, especially geographically; there is an incredible concentration of jobs and investment in the top markets, in this case Boston, San Diego and the Bay Area and challenges finding support and funding anywhere else.
But just like tech giants stretching their footprints into secondary markets like Austin, Atlanta and Nashville, biotech and life sciences facilities are popping up more and more in Seattle, Chicago and North Carolina's Research Triangle. But in this era of the great acceleration, there is a new class of nascent life sciences centers beginning to take shape that could become centers for investment and development.
Following the medical and science talent to sometimes unexpected places reveals a handful of markets where innovation and expertise exist.
“Human capital provides an enormous competitive advantage when it comes to creating and retaining companies,” the Council of State Bioscience Associations wrote in its 2021 report.
To varying degrees, the following markets have or are developing the infrastructure for larger and larger life sciences ecosystems, and it all starts with talent.
This center of Sun Belt sprawl has a surprisingly rich life sciences history, especially around diagnostics, dating back to the founding of the Translational Genomics Research Institute, or TGEN, in 2002. In the past few years, biotech talent and development have skyrocketed in Arizona, with the Phoenix metro boasting a national-best 8.5% sector job growth, per a CBRE study.
A handful of big-name projects are taking shape or breaking ground, including Wexford Science & Technology’s downtown innovation lab and a significant planned expansion by the Mayo Clinic of its existing North Phoenix campus. The success of local startups like OncoMyx Therapeutics, which just netted a $50M Series B last month, also showcase renewed confidence in the region.
The city’s growth may come as a surprise to those who still view local institutions like Arizona State University as party schools, not a growing recipient of National Institutes of Health funding for research and tenants at the 30-acre Phoenix Biomedical Campus.
The city has been following a 20-year blueprint for biotech development that has really started to pay off in recent years, Wexford Director of Development and Phoenix Market Lead Kyle Jardine said. Expansive downtown residential development has created walkable, amenity-filled urban neighborhoods attractive to top talent.
“The maturing of the academic institutions here has been phenomenal,” he said. “And between TGen and the three universities here, there’s a great talent pipeline.”
Jardine predicts 500K SF of life sciences development, if not twice that, will sprout in the region in the next few years, with 2M to 3M SF more on the Phoenix Biomedical Campus in the next decade. Wexford’s 227K SF 850 PBC development, which he said has 1,500 residential units under construction within a five-minute walk, has benefited from the creation of what he calls a “true knowledge community.”
“There is capacity and the ability to expand and grow here, and the city is supportive of it,” he said.
Few people symbolize Oklahoma's pivot toward science and tech more than Christian Kanady, a self-described “recovering oil and gas executive” whose own recent move toward investing in biotech highlights a larger shift in the state from resource extraction to talent development.
A 400K SF innovation hub is under development downtown, supported by the University of Oklahoma and Oklahoma Medical Research Foundation. It will serve as a new home for Wheeler Bio, a biomanufacturing startup that will be funded in part by Kanady’s Echo Investment Capital.
A significant catalyst for the city’s investment in the industry was a series of Brookings Institution reports in 2017 that said the area was ripe with assets and real estate for an innovation district, said Katy Boren, the president and CEO of Oklahoma City's Innovation District. Part of that assessment was due to the city’s fairly expansive, and under-recognized, medical and bioscience infrastructure, she said, including a collection of world-class research and medical institutions, like the Stephenson Cancer Center and Dean McGee Eye Institute.
“We have a recipe here, with all these players and what we have in this district, to really fill in some opportunity, and to take it to the next level,” Boren said.
There are significant challenges ahead for the growth of OKC as a life sciences hub. The city lacks the density, diversity and big names to really lay claim to being a biotech cluster. But the breadth of talent and community buy-in makes it a potential dark horse when it comes to industry growth.
In Minnesota's biggest city, economic development teams and the medical community are following a similar blueprint to that of Houston, where lab developers have bet on the city’s robust medical community and pool of talent, envisioning massive life sciences campuses and a flowering of the city’s biotech industry.
That bet in Minneapolis is that in-state research institutions like the Mayo Clinic, the city’s universities and a giant medical device industry can help catalyze more biotech development.
The funding figures suggest a good bet. Venture capital activity for Twin Cities life sciences outpaced Austin and Houston in recent years and ran nearly even with Denver, according to JLL research, and the University of Minnesota ranked in the top 10 in research spending among U.S. public universities. Local boosters point to the city’s lead in the medical device field — including the executive headquarters of industry giant Medtronic and 15 of the world’s 20 top firms in the sector — as well as a lower cost of operations, as key selling points. Colliers also named it one of the top emerging markets in the nation.
“It’s emerging, but also has a long-term legacy in terms of the medical device industry,” said Colliers Associate Vice President Michael Anderstrom, a life sciences and science expert who expects new spec development in the region to total hundreds of thousands, if not a million, square feet of mostly biotech space in coming years.
“It’s easy to overlook us, to consider the market a kind of little brother compared to what’s happening up and down the coast," Anderstrom said. "But we’re ripe for explosive growth based on the infrastructure already in place. It’ll just take a little more time for the dollars to trickle in and momentum to push through.”
Anderstrom points to big expansion in the works in three of the state’s biggest existing life sciences campuses, 4front and University Enterprise Labs in the Twin Cities and Discovery Square in Rochester near the Mayo Clinic, as well some in-the-works plans for adding more biomanufacturing capacity. A new entity formed from existing local firms, Scale Ready, will focus on cell and gene therapy.
“2021 saw a record level investment across the nation in life sciences, and now it’s finally coming to us in flyover country,” he said.
The Mile High City is quickly shedding the emerging label, as its rapid growth in recent years has positioned it as a potential leading hub for life sciences investment.
The area around Denver has become the 10th-largest life sciences market in the nation in terms of total lab square footage, per CBRE Executive Vice President David Saab, and raised a record $704M in Q1 2021.
The neighboring Fitzsimmons Innovation Community — a former Air Force base-turned-biotech center expected to finish its build-out at the end of 2022 — and the University of Colorado Anschutz Medical Campus together represent one of the largest combined bioscience developments in the nation, home to over 80 startups with 125 acres of space still open to future development.
Employment has grown 80% since 2001, and a recent Cushman & Wakefield report pointed to further growth opportunities in Boulder and the Novartis campus in Longmont. Like many emerging life sciences markets, the need for increased VC investment has been cited as a barrier to more growth.
While lab space and innovation centers tend to get the bulk of press attention when it comes to life sciences real estate, the nation is struggling with a shortage of biomanufacturing spaces. And few states offer as much potential, and existing infrastructure, for expansion as Indiana.
Indiana as a whole has a remarkably diverse biotech industry, including leading firms such as Eli Lilly & Co., Anthem and Roche Diagnostics, as well as an expanding biomanufacturing sector bolstered by extensive local investment in talent. In the town of Fishers, in northwest Indianapolis, roughly $1B in new investment was announced in the last year, including announcements of new facilities from List Biotherapeutics Stevanato and INCOG Biopharma Services. Last year also saw extensive investment in cell and gene therapy manufacturing sites.