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Photo courtesy of Newmark
A steady surge of venture capital funding helped Greater Boston maintain its leading position in life science in 2021, according to a brokerage report which tracks the growth of the industry and its real estate footprint.
Nearly 30 million square feet of life science space is proposed in Greater Boston, exceeding the market’s 26.8 million-square-foot existing inventory, according to Newmark’s mid-year life science overview report.
“While there are some concerns of excess supply, particularly as the number of office-to-lab conversions increases, pre-leasing activity remains above 70 percent for product currently under construction,” the report stated.
The local market has nearly 7.4 million square feet of life science space under construction and another 2.5 million square feet of conversions under way. Tenants are looking for nearly 6 million square feet of lab space, according to Newmark data.
Venture capital firms have accelerated their investment in the life science industry amid demand for COVID research and vaccines.
During the previous 12 months ending in June, Greater Boston life science companies received $11.7 billion in venture capital funding, representing over a third of the $33.1 billion invested nationwide.
The report ranked Greater Boston as the nation’s top life science cluster based upon its analysis of inventory, rental and vacancy rates, VC funding, rent and price growth, industry employment data and future pipeline of construction and lab conversions.
Investors paid $6 billion for life science properties in Greater Boston during the 12-month period, with average sales per square foot of $685. More than half of the sales volume was represented by BioMed Realty’s $3.45 billion acquisition of a 2.3 million-square-foot portfolio in Cambridge.
A separate report by industry group MassBio predicts a massive hiring spree for life industry jobs in coming years. The report said local biopharmaceutical companies in Massachusetts could need to hire up to 40,000 new employees by 2024 to accommodate their expansion, even after having growing 5.5 percent to nearly 85,000 total jobs in 2020.
