Despite some uncertainty in the US commercial real estate market with construction outpacing demand, now is the time to invest in new life sciences projects to keep pace with the industry’s future.
In a recent Bisnow article, Daniel Hackett, Principal, Unispace Life Sciences and Jennifer Schultz, Lead at Sullivan & Worcester share their insights about trends impacting the market and what’s in store for the future.
What’s trending
An increase in venture capital investing vs. permitting slow downs
Some local markets, like the Boston area have seen gains in venture capital investments in life sciences (32% allocation in 2023). However, permitting has slowed while markets adjust. While this isn’t necessarily a bad phase, few projects have been able to secure anchor or built-to-suit tenants early on.
Future demand is on the horizon
“It is currently a tenants’ market, but we expect to see the demand for more space quickly catch up.” - Daniel Hackett, Principal, Unispace Life Sciences
In the next five years in the Boston market, large leases will be ending, presenting an opportunity for life sciences companies to look for new and quality space coming to market. Combined with the natural growth of startups and innovation in the industry, we expect to see new space demand, especially when it comes to attracting and retaining talent.
Now is the time to start your next project
Due to the size and complex nature of many life sciences projects, permitting timelines can cause delays in moving projects forward against a tight deadline.
On average, it takes between 41 and 51 months just to get through pre-building permit approvals. - Jennifer Schultz, Lead at Sullivan & Worcester
Most companies are looking at a 6–8-year delivery timeline for a complete core shell, and tenant fit out. This means projects need to kick off now, to meet market demand.
