New York's Life Sciences Sector Is A 'Bright Spot' Amid The Pandemic
While office real estate has taken a hit amid the coronavirus pandemic, the life sciences sector has remained strong throughout this year.
Life sciences construction, leasing activity and funding for new projects has held stable throughout the global health crisis. There are between 800K and 900K SF of active lab requirements in New York City — some of which is coming from companies trying to combat the coronavirus, according to a CBRE report.
“The steady stream of life science projects under construction in NYC, coupled with continued flow of private and public funding, have positioned the market to continue the upward trajectory that we’ve seen over the last 18 months,” CBRE Vice Chairman Steve Purpura said in a release Wednesday. “We are anticipating another surge in activity following the lift of shelter-in-place orders given some pent-up-demand and the possibility of more requirements in response to the current health crisis.”
Since March 20, when the city shut down, interest in leasing at major life sciences properties in the city, such as 345 Park Ave. South, owned by Deerfield Management; the Taystee Lab Building, owned by Janus Property Co.; and Hudson Research Center, owned by Silverstein and Taconic has remained high.
Cell therapy engineering company BlueRocks Therapeutics announced in April that it would expand by 20K SF at Alexandria Real Estate Equities’ 728K SF Alexandria Center for Life Science at 430 East 29th St.
CBRE predicts that total annual funding for New York City life sciences from the National Institutes of Health will hit its highest amount in the past 10 years at $2.2B. Life sciences employment retention amid the current financial crisis has remained comparatively high, as the country’s total number of jobless claims has eclipsed 40 million.
New York City is shaping up to be a cluster at the intersection of the pharmaceutical and finance industries, Thor Equities Senior Vice President for Life Sciences Bill Hunter said on Bisnow's New York Life Science Repositioning 101 webinar Thursday.
“When you look at life sciences clusters overall, they all have a personality that goes along with them. Boston being one of the primary clusters, an educational cluster. San Francisco is really tech-oriented, and educational as well,” Hunter said. “I think when you look at the confluence of pharmaceutical and finance, you really look to Manhattan for that demand generator in that cluster.”
The sector will continue to rise because of the infrastructure that exists or has been built in the past, SGA New York Studio Manager Brooks Slocum said. The city has a growing tech sector, plenty of housing stock for high-paid workers and premier hospitals, he said.
“New York has enormous potential because it has all of the pieces that make an important cluster in New York itself already,” Slocum said.
East Egg Project Management principal Yasmeen Ahmed Pattie pointed to the number of companies looking for space in New York, even as office leasing has slowed to a halt, as a sign the life sciences sector is growing.
Both the public and private sectors have seen New York City’s life sciences sector as a lucrative investment over the past few years. Last year, the city committed to putting $500M to the sector and the state appropriated $650M in its budget. Developers bet hundreds of millions on the sector.
Now, with the city’s success in reopening reliant on rapid testing, it has been on the lookout for new life sciences properties to build walk-in testing centers in. City officials and economic experts predict that economic development planning around the life sciences sector will be key in the city’s recovery.