2020 Life Sciences Real Estate Outlook
Recent real estate reports by Cushman & Wakefield, Newmark Knight Frank, and JLL have all stated that the life sciences sector holds a unique place in the disruptive new landscape resulting from COVID-19. All three reports feature Los Angeles, recognizing the active and robust life sciences industry in the county. LA is recognized as an important life sciences cluster for its growth potential fueled by a solid research foundation, a large talent pool, and a diverse ecosystem.
Key insights from the reports include:
The life sciences industry draws from a massive talent pool within the region and accounts for 191,000 life sciene industry jobs within LA County, with annual earnings averaging $90,000. LA County’s life sciences industry generates $42.5 billion in economic activity.
Substantial VC funding presence in part due to proximity to Silicon Valley- long-time VC firms like Upfront Ventures are devoting more of their attention to life sciences and healthtech, joined by other firms like Anthos, B Capital Group, Fika Ventures, MarsBio, Pritzker Group and Summation Health Ventures. With a record year, 2019 attracted $8.2 billion worth of investments of which $2.0 billion was invested in healthcare, including life sciences. This is a significant increase compared to an annual average investment of $458 million in the sector over the last 10 years.
On average, the LA/OC region has attracted $954 million in NIH grants per year since 2015 and received $1.1 billion in 2019. As of May 6, 2020, $437 million as awarded to the region, ranking it 5th in the U.S. While there are many life sciences firms in LA, much of the demand and growth is from early stage companies.
Incubator, lab and coworking spaces, such as LabLaunch, HATCHspaces, BioLabs at The Lundquist Institute, and Cal State LA BioSpace, are supporting an increasing amount of life sciences startups, driven by top life sciences educational institutions, such as UCLA, Caltech, and others in the Cal State system. There are currently 13 life science incubators in LA, totaling over 130,000 sf with more coming. All are operating at capacity and continue to graduate firms.
One of the issues with tracking the life sciences industry in LA is that there is not one specific submarket that dominates the area, but rather, several different clusters spread out over a large geographical area. Major clusters include Thousand Oaks (near AMGEN), Northridge (near Cal State Northridge), Santa Clarita Valley (near Mannkind Corporation), Pasadena (near Caltech and City of Hope), East LA (near USC and Cal State LA), West LA (from UCLA, to Kite Pharmaceuticals to The Lindquist Institute) and Irvine (near UC Irvine).
Source: Cushman & Wakefield
You can download the full reports here: Cushman & Wakefield, Newmark Knight Frank, JLL.
