{"id":1004604723,"date":"2022-09-29T02:52:58","date_gmt":"2022-09-29T10:52:58","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004604723"},"modified":"2022-12-08T18:02:50","modified_gmt":"2022-12-09T02:02:50","slug":"slowing-biotech-sector-should-turn-for-the-better","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/slowing-biotech-sector-should-turn-for-the-better\/","title":{"rendered":"Slowing Biotech Sector Should Turn for the Better"},"content":{"rendered":"
\"Amber<\/a>

Amber Schiada, Americas Head of Work Dynamics and Industry Research, JLL. Image courtesy of JLL<\/p><\/div>\n

Despite a year that so far is a letdown from 2021\u2019s record level of demand growth, the longer-term outlook for the life science industry\u2014and for the real estate it occupies\u2014remains positive,  according to JLL\u2019s 2022 Life Sciences Research Outlook & Cluster Rankings, released Wednesday.<\/p>\n

Noting that \u201cScience doesn\u2019t stop,\u201d authors Amber Schiada, Americas Head of Work Dynamics and Industry Research, and Travis McCready, Head of Life Sciences, Americas Markets, tally the varied reasons for optimism, including a steadily increasing percentage of the U.S. population who are over 55, cash-rich Big Pharma companies and the ongoing flow of novel therapies.<\/p>\n

Still, the shorter term does look bumpy.<\/p>\n

\n

READ ALSO<\/strong>: Build-to-Suit or Adaptive Reuse? Meeting Lab Space Demand<\/a><\/p>\n

\n

To oversimplify, beyond the underlying demographics of an aging population, venture capital drives the biotech sector, expansion of which drives demand for life science space. And venture capital going into biotech this year is nearly 40 percent below the peak from 2021. In fact, the authors pointed out, such investment in 2021 has fallen to barely above 2020 figures.<\/p>\n

\"Travis<\/a>

Travis McCready, Head of Life Sciences, Americas Markets, JLL. Image courtesy of JLL<\/p><\/div>\n

Not only is this a direct effect on the market, but to conserve their current capital reserves, many biotech companies are retrenching, cutting headcounts and space, and often putting unneeded space onto the sublease market.<\/p>\n

Given the correlation between demand for space and recent funding levels, the report predicts, \u201cUntil there is a rebound in venture funding, and IPOs and secondary offerings pick up, demand is likely to stay well below mid-2021 levels\u2026. And so long as demand remains soft, there will be a re-emergence of Class A and B products in markets with large amounts of space delivered in recent years\u2026.\u201d<\/p>\n

Down, then back up<\/h2>\n

On the positive side of things, the outlook says, \u2018the long-term potential of the sector remains materially unchanged since 2021.\u201d<\/p>\n

Although the supply landscape has shifted in the past 12 months, \u201cdemand remains above historical levels and space is still scarce with vacancy below 6 percent across the top clusters in aggregate,\u201d JLL notes.<\/p>\n

Further, life science innovation is happening more rapidly than ever, and crucially, \u201cThree of the largest annual revenue jumps in biotech R&D in the past 20 years have occurred in the past five years,\u201d according to the report.<\/p>\n

As a result, Big Pharma companies have plenty of cash, leading JLL to anticipate that funding and acquisitions by these companies will close some of the gap created by private capital stepping back.<\/p>\n

The outlook concludes that \u201cwe expect belt-tightening to continue into next year, but as the biotech indices may have hit a low point in early summer, so a long, slow recovery in valuations may already be underway.\u201d<\/p>\n

The outlook\u2019s ranking of the top 15 life science cluster markets largely highlights the usual powerhouses, with metro Boston and the Bay Area at number one and number two.<\/p>\n

What\u2019s new is that JLL Research has introduced a new market ranking tool intended to guide occupiers with respect to market opportunities and provide investors with information on the momentum and resilience of each cluster. For that, see the full report<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Despite softer demand, the life science sector\u2019s underlying strengths will soon reassert themselves, according to the latest JLL report.<\/p>\n","protected":false},"author":882,"featured_media":1004527732,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,21754,23891,21742],"tags":[32796],"class_list":["post-1004604723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-medical-office","category-national","category-latest","tag-jll"],"acf":[],"yoast_head":"\nSlowing Biotech Sector Should Turn for the Better - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Despite some issues impeding demand for life science space, the sector\u2019s underlying strengths will soon reassert themselves, JLL reports.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/slowing-biotech-sector-should-turn-for-the-better\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Slowing Biotech Sector Should Turn for the Better\" \/>\n<meta property=\"og:description\" content=\"Despite some issues impeding demand for life science space, the sector\u2019s underlying strengths will soon reassert themselves, JLL reports.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/slowing-biotech-sector-should-turn-for-the-better\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2022-09-29T10:52:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T02:02:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/05\/Image-by-Michal-Jarmoluk-from-Pixabay-300x233-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"300\" \/>\n\t<meta property=\"og:image:height\" content=\"233\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/slowing-biotech-sector-should-turn-for-the-better\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/slowing-biotech-sector-should-turn-for-the-better\\\/\"},\"author\":{\"name\":\"Scott Baltic\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/61ac1450f3ffaa0e850b834c28526555\"},\"headline\":\"Slowing Biotech Sector Should Turn for the Better\",\"datePublished\":\"2022-09-29T10:52:58+00:00\",\"dateModified\":\"2022-12-09T02:02:50+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/slowing-biotech-sector-should-turn-for-the-better\\\/\"},\"wordCount\":562,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/slowing-biotech-sector-should-turn-for-the-better\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2021\\\/05\\\/Image-by-Michal-Jarmoluk-from-Pixabay-300x233-1.jpg\",\"keywords\":[\"JLL\"],\"articleSection\":[\"Featured\",\"Investment\",\"Medical Office\",\"National\",\"News\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/slowing-biotech-sector-should-turn-for-the-better\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/slowing-biotech-sector-should-turn-for-the-better\\\/\",\"name\":\"Slowing Biotech Sector Should Turn for the Better - 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