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Raleigh/Durham Demand for Life Sciences Space Remains Strong


Life Sciences Update

Life Sciences Update: September 2023

The hypergrowth experienced by the life sciences sector early in the pandemic has given way to a much more normalized environment today—with funding in the life sciences space having declined 26% year-over-year (YoY).
Sandy Romero • 9/28/2023

Raleigh/Durham Demand for Life Sciences Space Remains Strong

Increased investment and employment in the life sciences sector has driven life sciences related real estate to new heights, according to Cushman & Wakefield’s new 2022 Q1 Life Sciences Update.
Kristine Smith • 3/17/2022

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Raleigh/Durham Demand for Life Sciences Space Remains Strong

Kristine Smith • 3/17/2022
Increased investment and employment in the life sciences sector has driven life sciences related real estate to new heights, according to Cushman & Wakefield’s new 2022 Q1 Life Sciences Update.

One of the world’s largest life sciences clusters, North Carolina is home to 735 life sciences companies, 569 of which are located in the Research Triangle region in Raleigh/Durham. Demand for life sciences space remains strong, leading to numerous proposed projects (new construction and conversions) totaling approximately 8.2 million square feet. Nearly all new single-story construction is targeting cGMP/manufacturing occupants while new R&D buildings are typically multi-story facilities.

While Raleigh/Durham has one of the smallest life science inventories among the top-tier markets, it has one of the highest shares of lab space as a percentage of the office inventory. At 20%, the only market with a higher share of lab space is San Diego.

Rental rates are anticipated to go up as the quality of life sciences space improves. Additional factors such as dwindling land availability, along with increased land basis and increasing construction costs will also accelerate the increase in cost of life sciences space in Raleigh/Durham.

Raleigh/Durham boasted some of the highest rent growth compared to other markets, climbing 120% over the last five years. Despite that, it remains one of the most affordable options for top-tier life science markets in the nation.

Attracted to an extensive talent pool and stable business environment, several life sciences firms have recently announced plans to expand or develop new facilities. In total, the announcements reflect a $4 billion investment and the creation of 4,000 jobs. BioAgilytix Labs is one of many national companies that expanded their headquarters in 2021, with plans to create 878 jobs and invest $61.5 million in Durham.

Nationally, life sciences employment has continued to fare better than the U.S. job market with year-over-year 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. Since 2001, Raleigh-Durham has experienced a 154% increase in life sciences employment, with the employment and talent pool reaching 19,400 current and potential employees.

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