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Philadelphia is the fourth-best life sciences market in the nation, according to a new report.
Colliers’ annual life sciences report said $1.4B in National Institutes of Health government funding, vacancy rates of 7.7% in the region and a high level of biomedical degree completion help position the Philadelphia region as a leading player.
The City of Brotherly Love lags only behind the most established hubs within life sciences. Boston holds first place, followed by the San Francisco Bay Area and San Diego.
While funding slowed nationally and regionally — venture capital plummeted to $29B last year across the country — in Philadelphia, three major firms collected about $100M in investment together in the last quarter of 2023.
"Access to funding has been challenging this year, but $100M in raises in Q4 shows availability persists and as conditions evolve and companies return to confidence on the ability to lease space — Philadelphia will continue to be a highly competitive option," Joseph Fetterman, an author on the report, wrote on LinkedIn.
There is 23.4M SF of available inventory in Philadelphia. Another 2.5M SF is under construction, but about 45% is pre-committed by companies such as Spark Therapeutics, WuXi and SmartLabs, the report says. Most of that leasing is in University City.
In addition, David Werner Real Estate Investments purchased the multi-building Pfizer campus in Collegeville, Pennsylvania, last August. That $180M acquisition helped keep Pfizer and Dow as major tenants in the region.
Philadelphia ranked third in the nation for absorption and fourth for vacancy, Colliers said. It has the fourth-largest construction pipeline.
"As VC funding activity recovers and early-stage companies continue to expand, the vacancy will be absorbed and projects on hold will move forward in the pipeline," the report states.
Nationally, 20M SF of life sciences deliveries set a new record in 2023, and limited absorption led to increases in vacancy and sublease availability.
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