Philadelphia Life Sciences Sector Chasing Rivals In Boston
Philadelphia’s life sciences may be weathering the coronavirus pandemic better than many other commercial real estate sectors. However, the sector still faces many challenges, including competition from rivals in the Boston-Cambridge market.
Philadelphia’s life sciences market ranked eighth in a 2019 CBRE report, topping Chicago and Los Angeles based on laboratory inventory, sector employment and the size of funding sources, among other factors. The City of Brotherly Love ranked fourth in CBRE’s ranking of Medical Research and Health Services. It had the second-largest increase in venture capital funding between Q1 2017 and Q3 2018, gaining nearly 500%, CBRE said.
The Boston-Cambridge market, however, was the country’s largest life sciences cluster overall in CBRE’s ranking. Boston’s roots in biotechnology date to the 1970s and it remains a formidable rival to Philadelphia, according to participants in a Bisnow webinar last week.
“Both big pharma and drug development co-exist in relatively close proximity to the institutional research community [in Boston],” Colliers Executive Vice President Joseph Fetterman said. “That is something that has never historically been the case in Philadelphia. Further, the state of Massachusetts has put some major, major money behind promoting drug development.”
Philadelphia is starting to make its mark, and some companies based in the region are making headlines recently. Both GlaxoSmithKline, the U.K. company whose U.S. subsidiary is in the Navy Yard, and Inovio Pharmaceuticals of Plymouth Meeting, Pennsylvania, are working on a coronavirus vaccine.
Gene therapy company Spark Therapeutics is going to be the sole tenant of a 64K SF property at 3000 Market St. that owner Brandywine Realty Trust is converting into a life sciences office.
Spark, which sold to Swiss pharmaceuticals giant Roche for $4.3B in December, also is planning to move into a new headquarters on the other side of Market Street in the city’s University City neighborhood.
“If you ask some of the top scientific leadership in Philadelphia, they will tell you that we have some of the greatest concentration of foundational research in gene and cell therapy in the world, not just greater than Boston,” University Place Associates President Anthony Maher said in an email.
Maher, who also participated in the webinar, is developing the $100M 3.0 University Place and $125M 4.0 Univesity Place project, which will provide a total of 500K SF of LEED and WELL Platinum Lab Space in University City.
According to Audrey Greenberg, executive managing director of The Discovery Labs, Philadelphia’s proximity to an international airport makes it attractive to cell and gene therapy companies that need to transport samples of human tissue.
Discovery announced earlier this year that it would build a $1.1B, 680K SF contract development and manufacturing facility within its King of Prussia campus. The project is a joint venture with New York-based Deerfield Management. It will employ 2,000 people, becoming the world’s biggest contract development and manufacturing organization.