By Joshua Burd
Continued demand for life sciences space in New Jersey and other top markets has fueled an uptick in rental rates over the past year, according to a new report by CBRE.
Researchers with the firm say the Garden State, which has 20.4 million square feet of laboratory and research and development space, has seen an increase in net lease pricing in which a tenant agrees to pay rent and any additional cost associated with the property. To that end, prices for lab space in the state have increased between 10 and 15 percent since mid-2020, showing the tremendous appetite from users.
The surging demand comes amid significant increases in funding and employment within the life sciences sector, spurring additional construction in some leading U.S. markets, the CBRE report found. New Jersey, however, is not among those markets that are seeing significant new development, but is at least starting to see the conversion of older office to lab space take place.
The report also notes that biomanufacturing is currently the dominant driver of life sciences activity in New Jersey, equating to roughly 800,000 square feet of demand in the market. One of the largest such deals in the state over the past year came in the third quarter of 2020, when Century Therapeutics leased 55,000 square feet in Somerset County.
“Its position as one of the country’s largest life sciences markets, as well as being home to many of the world’s top universities, make New Jersey one of the most sought-after states for both venture capital investors and premier pharmaceutical companies,” CBRE Senior Vice President Tom Sullivan said.
As of the report, CBRE identified some 1.2 million square feet in overall demand from life sciences users in New Jersey, stemming from roughly 15 tenants in the market. That equates to a sixth-place ranking nationally behind Boston, the San Francisco Bay Area, San Diego, Denver-Boulder and Philadelphia.
