Covid-19 research demand has given a big boost to ‘Life Sciences’ real estate sector

Covid-19 research demand has given a big boost to ‘Life Sciences’ real estate sector
US life sciences real estate industry has seen growth ever since the onset of covid-19 pandemic. This has particularly happened in the midst of a race for producing corona-virus vaccine and other medicines to fight Covid-19 infection. New heights were reached in research & development and venture capital funding in the year 2020, which led to high demand for life science real estate in the present market; consequently the employment in this sector has also seen a boost.

The rate of building life science real estate is however unable to catch up to the ongoing high demand. In the end of the second quarter of 2020 we observed that the rents had started seeing an increase in most of the life sciences markets.

In the second quarter of 2020 venture-capital investment saw an enormous growth to an annual total of $17.8 billion, which was the main reason behind the real estate gains in this sector. In July 2020 employment figures in the professions related with biotechnology R&D surpassed 220,000.

The interest and attention towards the life science real estate sector was already there among the stake holders (financial backers, Researchers, investors & developers) but the sudden surge in finances and efforts towards this sector were due to sudden occurrence of Covid-19 pandemic.  Along with the already established markets of San Diego, San Francisco and Boston, the demand for lab space saw a boost in emergent markets of Seattle, Raleigh-Durham, New York City and Philadelphia also.

Be it growing employment related to R&D, health needs of our aging population or the investment from private sector for fighting pandemic; each indicator hints towards the fact that the U.S is seeing an increased demand for life sciences real estate. The current situation is actually fueling the demand for more lab spaces in the markets as the investors also find it more profitable to put their capital in research and development/lab space building.