Lab Space In NYC Set To Double Over Next 2 Years
Real estate for Big Apple life science companies is set to double in the next two years, providing more inventory to the rapidly growing industry that has faced a dearth of options in the city.
There is just 1.6M SF of lab space in New York City, according to a report from CBRE released this week. But that figure is set to double over the next two years, with around 1.5M SF now under development.
“New York is a top-five market for new talent, with a growing number of graduates holding degrees in biological and biomedical science,” CBRE Tri-State Director of Research and Analysis Nicole LaRusso said in a statement. “The collection of top-tier universities here, like NYU and Columbia, and in surrounding suburban markets continuously offers an impressive pool of candidates for life sciences companies.”
New York City has lagged behind places like Kendall Square in Cambridge, Massachusetts, when it comes to lab space. But in recent years, New York has worked toward positioning itself as a biotech hub.
In 2016, Mayor Bill de Blasio announced a $500M initiative to advance life sciences in the city, with the view of adding millions of square feet of lab space to the city’s supply.
Last year, Alexandria Real Estate Equities reached an agreement with the city to build a 550K SF tower at the Alexandria Center for Life Sciences, adding a third building at the developer's campus on FDR Drive between East 28th and East 30th streets.
Alexandria has also bought The Bindery building in Long Island City, which it plans to reposition for life sciences, and acquired Pfizer’s headquarters on East 42nd Street with David Werner for $360M.
Taconic and Silverstein Properties jointly own the Hudson Research Center at 619 East 54th St. where the developers are planning an expansion.
CBRE noted that employment in life sciences has grown 45% in the last two decades, and funding is still on the rise.
The National Institutes of Health, a major capital source for life science projects, provided $1.8B in funding to projects in New York City last year, according to CBRE, an 11% increase over 2017. Meanwhile, venture capital provided to life sciences in the city jumped from $300M in 2017 to $611M last year.
“The exponential growth in life sciences seen in Boston and San Francisco is starting to be realized in a few other locations, including New York City,” CBRE Vice Chairman Steve Purpura, who specializes in life sciences, said in a statement.
New York City’s life sciences sector is typically dominated by smaller, early stage companies that have come out of the city’s academic institutions and medical centers.
In the past, many have left the city because there was no commercial wet lab space available, BioLabs Managing Director Nicole McKnight told Bisnow last year. BioLabs provides coworking space for life science startups.
“Landlords can do a couple of things to help. They can take a risk on these startup companies that don’t necessarily have great credit,” she said at the time. “They’ve been able to raise millions in venture capital, but they aren’t your typical, top-credit companies.”