Insights

Q1 2022 Life Sciences North American Update

The life sciences industry has been on the rise over the past half-decade thanks to a surge in new products and technology, as well as an influx of capital from both public and private investors.

The last two years have seen tremendous growth with $70 billion of private equity capital and public National Institutes of Health (NIH) funding pouring into life sciences-related companies in North America in 2020 and a record $78 billion in 2021.

This Q1 2022 Life Sciences Update breaks down the current trends in the life sciences industry at a high level by exploring:

Where the capital is flowing;
Where the talent can be found; and
The impact on the lab space market (i.e., demand, cost and new construction).

The report also contains a market-by-market analysis that provides detailed overviews of some of the largest life sciences markets in the U.S., including:

Boston	Philadelphia	San Francisco Bay Area
New York City	Raleigh / Durham	Suburban Maryland (I-270 Corridor)
New Jersey	San Diego

Additional markets covered also include:

Denver

Greater Los Angeles

Select each tab below for a preview of highlighted insights featured in the full report.

Even though NIH funding declined for the first time since 2014, 2021 funding—$33.5 billion—still outpaced pre-pandemic levels by 7.8%. It continues to be weighted towards the largest markets, with the top 10 markets accounting for half of all U.S. funding.

Life sciences employment has continued to fare better than the U.S. job market with YoY growth up 7.9% and 11.4% in 2020 and 2021, respectively. Since 2011, total U.S. employment growth has averaged 1.0% per year while life sciences employment has increased by 6.6% per year, on average. The top 10 life sciences MSAs account for 45% of the U.S. life sciences talent pool led by Boston, NYC-NJ, San Francisco, Philadelphia and San Diego.

There is a direct correlation between the depth of the employment pool and the life sciences inventory in each market. Across the 12 markets analyzed, the average inventory-to-talent ratio is 425 sf.

Growth in the life sciences sector has directly translated into increased demand for lab space across major markets. Coupled with strong capital flows, life sciences companies have increased their footprint in most markets, driving up rents and increasing occupancies.

Source: Cushman & Wakefield Research

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