Last year’s solid venture capital investment in life sciences was, as expected, focused on the big three markets of San Diego, Boston and San Francisco. But as a Cushman & Wakefield report found, emerging markets saw significant spikes of interest, perhaps suggesting a shift toward building startups and more lab space outside established markets.

Some nascent centers of biotech investment saw big years, bolstered by a handful of headline-grabbing deals: Denver got an influx of $486.6M, up 6%; Austin startups nabbed $345M, up 80%; Minneapolis firms raised $275M, up 26%; and Atlanta saw $86M, up 2%. Many of these markets also saw a handful of big real estate deals.

In the Denver region, BioMed invested $625M in Flatiron Park, a 1M SF, 22-building campus near the University of Colorado Boulder’s BioFrontiers Institute. In Austin, Alexandria Real Estate Equities picked up a 3.8-acre tract downtown for $108M.

Overall, life sciences venture capital investment and IPO announcements slowed in 2022 from the frenzied pace of 2021, which set funding records.

The overall economic slowdown had led some analysts to question whether real estate investment in secondary and tertiary biotech markets would continue, as investors become pickier in a more difficult funding environment. The big three took two-thirds of the $35.8B in startup investment last year, but smaller markets did see gains.

The report concludes that based on the amount of dry power leading VCs have, it would be reasonable to believe $46.4B would be invested in life sciences in 2023. But it also predicts a more conservative funding environment, which may further challenge emerging markets.