By John Obeid
The nation’s life sciences sector continues to expand, boosted by technological advancements, growing employment and a strong economy.
While Boston and San Francisco remain the country’s main life sciences hub, their tightening inventory and constrained labor force has driven momentum south to the Garden State.
And it makes sense. With a history spanning over a century, New Jersey has been at the forefront of life science related research, backed by its talented workforce and strategic location in the heart of the Northeast corridor between Boston and Washington D.C.
With New Jersey focusing on growing their life sciences industry, the latest employment figures have been promising. Between 2017 and 2Q 2019, the state added 8,632 life sciences jobs which represents a 7.7% increase.
Overall, the biotechnology sector has seen the largest increase in employment with a 9.2% growth rate from 2017, while medical devices and pharmaceutical companies increased by 7.5% and 6.5% respectively. Additionally, Teva Pharmaceutical’s recent relocation of their U.S. Headquarters to Parsippany from North Wales, PA will bring another 1,000 high paying jobs to the state and will occupy 345,488 SF at 400 Interpace Parkway.
All this good momentum has been positive for the New Jersey commercial real estate market.
In addition to Teva Pharmaceutical relocation, there were several significant lease transactions completed by life sciences firms since 2018. Most notably, PTC Therapeutics signed a new 185,000 SF lease at the former Bristol-Myers Squibb space in Hopewell.
Additionally, Celularity leased 147,215 SF at 170 Park Avenue in Florham Park moving their headquarters from Warren in an effort to consolidate their corporate offices, manufacturing and R&D into one building. Insmed completed a new lease for 117,022 SF at 700 Route 202/206 in Bridgewater followed by IQVIA’s 115,500 SF new lease at 77 Corporate Drive in Bridgewater. 777 Scudders Mill Road in Plainsboro saw an influx of activity in 2019, with Genmab leasing 90,070 SF and Croda taking down 69,836 SF at the former Bristol-Myers Squibb site.
In all, there were 13 life sciences transaction over 50,000 SF totaling 1.7 MSF since 3Q 2018.
The investment market for life sciences properties in New Jersey has also made headlines with the recent sale of the Center of Excellence in Bridgewater. Thor Equities, a global full-service real estate and development company, launched a new division that will be focused on the life science asset class.
The new group named, Thor Sciences, kicked off their campaign with the $152 million acquisition of the Center of Excellence in Bridgewater. The 784,000 SF campus is home to many life sciences companies such as Ashland, Kashiv, Nestle Health Science, and Avantor. Thor Sciences has plans to expand on the site, building out an additional 1 million square feet with potential for even more.
Despite the lack of available laboratory space in the market, the construction market has been somewhat limited. Major developments are taking place at Prism’s ON3 campus on the border of Nutley and Clifton. ON3 is located on the campus formerly occupied by Roche and is currently home to Hackensack Meridian Medical School, and Modern Meadow. In addition, Quest Diagnostics is developing a flagship 250,000 SF laboratory on a 12-acre parcel it purchased at the site.
Prism is also finalizing plans to construct a new speculative four-story 150,000 SF lab building at the site, which will be the first speculative lab construction in recent history.
The life sciences industry still has the potential create more jobs and further strengthen the State’s economy. The growth of start-up and mid-sized pharmaceutical companies along with gains in the biotechnology industry has fueled demand for space in New Jerseys’ commercial real estate market. This dynamic can help reestablish New Jersey’s former moniker as “The Medicine Chest of the World.”
