Innovative sectors such as cell and gene therapies, artificial intelligence and ancestry and genetic testing are all forecast to grow by as much as 37 percent annually in the next five years and drive a wave of demand for lab space, diagnostic centers and healthcare facilities, according to Cushman & Wakefield’s Life Sciences 2020: The Future is Here report.
Raleigh-Durham is currently home to 10 msf of lab space with a 10.7% vacancy rate and an average asking rent ranging from $15 to $35 per square foot, depending on lease terms. The supply of new lab space has been stagnant over the last 10 years, but the outlook remains positive due to rapidly increasing demand and market conditions tightening.
North Carolina is home to one of the most dynamic life sciences clusters in the U.S. with more than 600 life sciences companies located in the state. Approximately 450, or 75%, of those companies are located in the Research Triangle Park (RTP). Centrally located between Raleigh and Durham, RTP is the largest research park in North America and home to industry giants such as GlaxoSmithKline, IQVIA, PPD, and Biogen.
RTP includes prominent Fortune 100 multi-national corporations, university spin-offs and start-ups in its sprawling 7,000-acre campus. The Research Triangle Park Foundation describes RTP as a “global epicenter of technological innovation,” boasting a range of R&D companies and research institutions.
All of this research and growth requires capital, not to mention talent. Together, National Institutes of Health (NIH), venture capital and corporate R&D invested an estimated $125 billion in the pharmaceuticals and life sciences sectors in 2018. In the current decade, growth in life science-related employment has been more than three times stronger than total U.S. employment. As capital has flowed into life sciences, employment has increased leading to greater demand for lab and office space and a 12-million-square-foot pipeline under development.
The Triangle is home to three separate research universities (Duke University, University of North Carolina at Chapel Hill, and North Carolina State University) that produce more than 53,000 graduates annually. Life sciences companies can recruit top talent from the area’s abundant pipeline of graduates. Currently, there are 6,900 employees in Raleigh-Durham’s life sciences space, an 84% increase since 2010.
In 2018, Forbes ranked North Carolina No. 1 in its Best States for Business report for the second consecutive year. Key factors included its extremely low cost for doing business, minimal regulations, impressive growth statistics, and high quality of life.
For more information on leasing Life Sciences space, please contact Deb Boucher.