2023 Life Sciences Industry and Real Estate Perspective

The past twelve months in the life sciences industry have created a distracted tension. Doom and gloom with a light at the end of the tunnel. Indications of growth in some areas combined with stagnancy in others. However challenging the current landscape can seem, we are also living in a time of extraordinary scientific progress.

As this tension turns into equilibrium and the life sciences evolves, so does our annual industry report. This year’s research perspective explores familiar territory and paves a future landscape. Previous methodologies of life sciences biopharma cluster rankings have been reimagined, incorporating more robust data for each cluster based on access to talent, funding and real estate infrastructure. And that’s not all: new cluster models for the medtech sector and biomanufacturing asset class provide a new dimension. How can real estate and facilities foster a vibrant life sciences ecosystem that advances science, technology and innovation? We answer this for life sciences companies, investors and developers.

The 2023 US Life Sciences Industry and Real Estate Perspective features the following in-demand topics and more:

• Six major industry research themes, with a past and future lens for each

• Opportunities for CRE investors and life sciences companies

• A reimagined cluster index, unveiling top biopharma markets

• New medtech model highlighting five thriving geographies 

• New biomanufacturing model spotlighting five dynamic GMP markets

Robust demand for lab space will return when venture capital ramps back up

One of the purest relationships in the biotech subsector is between venture funding rounds and how the recipient startups use those funds to expand their footprints. In the wake of COVID-19, the investment craze meant that $10-$13 billion was invested per quarter across the U.S., instead of the typical $5-$6 billion. Companies that otherwise would have struggled to fundraise were successful in raising funds during this period, and in many markets those startups drove the rapid rise in demand for commercial lab space.

The immediate future of private capital flows deployed into the sector remains muddied. One hopeful sign is that the top-20 VCs focused on life sciences have record dry powder that will soon find its way into growing startups. With ample ammo and mandates to get deals done, the rest of 2023 will likely see more of what we’ve seen so far: mega deals for companies with top-notch science deep into the clinic. Into 2024, the likelihood that investment sees material gains is as likely as it has been in any period since the market turned in late 2021.

Life sciences job openings—a harbinger of better days ahead?

Finding the right talent is mission critical for biotech companies. Location matters deeply—especially to early-stage companies— whether it is clustering near like-minded groups or adjacent to concentrations of top-flight scientific talent. Sharp job posting declines in November 2022 coupled with an uptick in layoffs in Q1 2023 appeared as through life sciences job market would experience more slack. However, the appetite for new jobs has grown substantially in spring 2023 to record highs.

If this levels, it will likely bring about a rise of demand for lab space across the US, especially in roles that require bench work. Promisingly, six of the 10 most sought roles were in research & development (R&D). Established pharma companies have been driving much of the growth in job openings in 2023, as they are generally cash-rich and in strong financial positions.

New this year: what are the top medtech and biomanufacturing markets?

In addition to our biopharma top cluster markets, what’s new? This year, we launch our first ever medtech and biomanufacturing markets derived from a concentrated look at our model. Similar to our overall life sciences rank, the medtech and biomanufacturing models are comprised of variables such as employment, job postings and degrees, venture capital funding and clinical trials, and industry concentration and performance.

The life sciences industry is more than just the research and development of new therapeutics. It encompasses other life-impacting scientific endeavors: medical devices and technologies, and the emergence of biomanufacturing as a key driver of the overall industry’s evolution. Through our analysis, we’ve uncovered markets that show strength in these specific subsectors.

With each new discovery, drug, diagnostic or intervention comes an opportunity for us to rethink and reshape the infrastructure necessary to make science possible. Download our 2023 Life Sciences Industry and Real Estate Perspective to learn more.