While Boston, New York/New Jersey and the Bay Area continue to top the nation’s list as established markets for life science industry expansion, Los Angeles and the Washington D.C. region are now considered established clusters.
The Greater Boston area continues to be a leading global industry cluster that supports all aspects of the life sciences industry including biotechnology, pharmaceuticals, medical devices, diagnostics and bioinformatics, the report said.
"Because of the industry’s mature critical mass in the area, new companies and venture capital investments are common. The cluster has a large life sciences industry focus and includes geographic submarkets that are both established and emerging," the report read. "The Cambridge submarket is the core of the Massachusetts life sciences industry. Many start-ups begin here and grow until they are acquired or relocate as they outgrow space options."
In light of rapid evolution in the life sciences sector, Jones Lang LaSalle conducted a comprehensive study to identify the top markets for real estate expansion for life sciences companies focused on pharmaceuticals, biotechnology, medical device technology, agricultural biotechnology and biofuels.
The firm’s Life Sciences Cluster Report ranks 16 emerging and established clusters in the U.S. according to relevant criteria to gauge where leading-edge companies are positioning their facilities to gain competitive advantage.
Though market activity is picking up in most clusters, speculative construction continues to be rare in nearly all clusters, demonstrating market awareness of constricted demand. However, several companies are executing large-scale built-to-suit projects, signaling a long-term commitment to their respective clusters. These include Astellas’ 445,000-square-foot headquarters project in Chicago, GlaxoSmithKline’s $81 million, 205,000-square-foot headquarters in Philadelphia, and Biogen’s 497,000-square-feet headquarters in Cambridge.
Los Angeles’ vast number of hospitals, universities and research facilities and its large college-educated population should help propel its growing biotechnology sector to complement its mature medical device presence.
Washington D.C./suburban Maryland’s close ties with government agencies and world-renowned academic research centers has supported a wave of early start-ups that has given way to mid-stage companies ripe for acquisition by major pharmaceutical companies. Rounding out the top seven established clusters are Philadelphia and San Diego.
The study also reveals several surprising U.S. regions are emerging as key players in the field including: Minneapolis, Chicago, Denver, Houston, Florida, Atlanta and Indianapolis. Emerging clusters like these are underway on new construction projects to foster innovation and training. This activity is expected to draw life science occupiers.
"A life sciences cluster typically develops as a result of a specific geographic region’s educated workforce, plentiful venture capital and economic development incentives, industry-friendly political structures, strict patent protection laws and strong ties to top universities and other supporting infrastructures and organizations," said Bill Barrett, executive managing director, life sciences at Jones Lang LaSalle. "While coastal hubs in the Northeast and California represent cornerstone locales and will continue to play an important role as the headquarters cities for many of the industry’s largest players, other markets are steadily emerging as locations of interest."
Rankings were based on the following criteria: percentage of total employment in high-tech research and hospital/medical fields; number of science & engineering graduate students; National Institutes of Health (NIH) funding; venture capital funding; R&D spend as a percentage of region’s total state GDP; and square-footage of academic and research facilities.
