Somerset Corporate Center in Bridgewater — Courtesy: SJP Properties
By Joshua Burd
From leasing to new construction, pharmaceutical and life sciences firms remained a leading force in New Jersey’s commercial real estate market through the first three quarters of 2022.
A new report by JLL said as much, noting that the sector has accounted for nearly one-third of office leases signed this year in the state, representing the largest volume of any industry group. Transactions completed during Q3 included Catalent’s 33,600-square-foot lease at 115 Campus Drive in West Windsor, along with UroGen Pharma’s 20,910-square-foot commitment at 400 Alexander Park in West Windsor and a 20,000-square-foot deal by Lexicon Pharmaceuticals at 100 Somerset Corporate Blvd. in Bridgewater.
The report by JLL’s Steven Jenco and Jon Haxhaj also noted that a drug maker, PTC Therapeutics, holds the market’s largest new office lease of the year with a 360,000-square-foot transaction in the second quarter, at 400 and 500 Warren Corporate Center Drive in Warren.
The firm will be moving its headquarters from South Plainfield.
“Despite growing macroeconomic headwinds during the past year, New Jersey’s life sciences arena remained active through Q3 2022,” the JLL researchers wrote. “Cell therapy and biomanufacturing tenants have been in expansion mode, while growing biotech companies are tapping the pool of skilled employees available following consolidations among the larger pharmaceutical players.”
The Interstate 78 and Princeton submarkets accounted for nearly 75 perecent of New Jersey’s life sciences leases year to date through October, JLL found. The regions are also seeing new construction to support the needs of pharmaceutical users, including the 400,000-square-foot biologic pharmaceutical and manufacturing facility that BeiGene is developing at the Princeton West Innovation Campus in Hopewell.
In Branchburg, Roche Molecular Systems recently broke ground on a $300 million expansion of its longtime home on Route 202, the report noted. Its plans call for a 75,000-square-foot diagnostics operations facility and a 100,000-square-foot warehouse that are expected to be completed by year-end 2023.
The activity comes as the state continues to grapple with consolidations and relocations in the industry, fueling an accelerating volume of sublease space being added to the office market during the past two years, JLL said. The largest block added in 2022 consisted of 94,500 square feet from Teva Pharmaceuticals at 400 Interpace Parkway, Building D, in Parsippany, as other major spaces loom at Sanofi and AbbVie campuses in Bridgewater and Madison, respectively.
Still, the pipeline stabilized in 2022, the report found, with less than 160,000 square feet hitting the sublease market since the beginning of the year, down notably from 423,160 square feet in 2020 and 554,400 square feet in 2021.
