Published on July 5, 2022
The field of life sciences sounds simple on the surface–the study of living organisms–but companies involved in its applications fill an enormous ecosystem that includes pharmaceutical research firms, biochemists, plant biologists, neuroscientists, ecologists and real estate developers.
Life sciences companies have increased their real estate footprint, driving up rents and increasing occupancies, according to a 2022 Cushman & Wakefield report. New products, consumer and physician needs, strong sector job growth and venture capital investment all contribute to the growth of life sciences innovation hubs.
Life sciences research needs expanded space in specialized facilities, such as wet labs for hands-on biochemistry and pharmaceutical R&D or dry labs to main precisely calibrated equipment. Life sciences hubs such as Boston, the Bay Area and San Diego are catalysts for real estate developers to convert buildings into lab space or build speculative projects to meet growing demand.
Boston is the largest life sciences growth center, with more than 9.6 million square feet of lab space under construction, followed by the San Francisco Bay Area with 2.9 million square feet and San Diego with 2.3 million square feet.
Analysts say the strength of the global market also suggests an upbeat outlook for additional U.S. life sciences centers, including Chicago, Southeast markets such as Raleigh-Durham and the Philadelphia-New York corridor. Life sciences hubs provide deep talent pools and lease costs that often are lower than in global commercial real estate centers.
Developers committed to life sciences do not just develop facilities. The largest have an ecosysytem of services that include venture financing, startup accelerators, universities and collaborative convening spaces.
Life sciences assets—the lab, office and building spaces that house the sector—go hand in hand with the industry’s innovative core. By adopting human-centered building development and design and working collaboratively with the scientists involved, life sciences developers can have a transformative, long-term economic impact, fueling new jobs, infrastructure and public amenities in the communities where the centers are located.
Life sciences real estate investment hit $21.4 billion in 2021 and the sector has grown by 111% since 2018, according to CBRE capital markets research. Life sciences laboratory space is in particularly high demand, CBRE analysts noted, a logical result of global interest in and demand for new medicine and drug treatments. The pandemic has catalyzed new biomedical research, and a robust pharma market targets the aging Baby Boomer generation.
The most active investors in the life sciences real estate sector were the top five owners of U.S. life sciences real estate: Alexandria Real Estate Equities, BioMed Realty (a Blackstone portfolio company), Healthpeak Properties, Ventas and Longfellow.
Venture capital investment plays an important role in the life sciences ecosystem. As life sciences companies grow, they can expand their real estate footprints. Venture capital funding in the life sciences sector hit a record $32.5 billion in 2021, according to CBRE.
Stock offerings in the life sciences also increased rapidly–faster than other fundraising categories. In 2020, life sciences companies raised $34.3 billion from IPOs, up 186% from the prior year. Institutional investors are actively involved in the sector, and federal funding for drug and medical research also is part of the mix.
Commercial real estate consultants advise life sciences real estate developers as they bring new inventory to market. For those trying to understand this growing real estate segment, CBRE, JLL and Newmark provide annual industry summaries by market. In addition, Stone Creek Partners has created a directory of life sciences facilities and designated owners and developers.
Effective life sciences marketers understand what goes into a potential tenant’s unique wish list, figure out what the properties can deliver and make sure both parties in the exchange understand how their expectations align. Life sciences companies need sufficient wet and dry lab space, and they want to be accessible to biotech and medical talent, suitable housing, convenient transportation and medical or educational institutions.
With similar wants and needs, life sciences firms thrive as clusters in urban centers with highly educated workforces. However, those clusters present marketing firms with a unique challenge when establishing a property’s brand—how to show how one building or development is the best possible fit for a client.
It’s important for marketers to track the progression of a life sciences market’s development, which revolves around the discovery and commercialization of drugs and medical devices. Those phases evolve from research and discovery, preclinical development, clinical testing and post-clinical marketing.
Adept life sciences real estate marketing agencies help clients navigate discussions about lab space construction and office-to-lab conversions while keeping the company on the public’s radar during the development period of the space, which can be a year or longer. Given the projects’ long lead times and hefty capital requirements, a key attribute of a successful life sciences marketer is flexibility and a specialized team.
Branding is important in giving life sciences real estate a point of differentiation. A brand is not just a visual identity, but also experiential. The goal should be to provide a tenant experience that serves as an identifier and keeps the various life sciences players—biotech, pharma and medical device companies and their suppliers and stakeholders—engaged within the client’s network.
Life sciences public relations agencies know how to speak the language of the industry and its investors. Some involve scientists in their outreach to help generate leads and form marketing strategies that speak to targeted audiences and influencers. Since many life-sciences companies are new businesses or startups, real estate marketing agencies also need to form strategies around and support clients’ investment potential.
PR is all about content, no matter what the subject. PR firms that work in life sciences real estate have multiple functions: working with media outlets to cultivate earned media; providing digital and social media content that bridges gaps between science and business, and developing thought leadership with writers who straddle those disciplines.
Classic marketers can help identify the brand pillars that distinguish a project and strategies that manifest them on the ground. Diversity and ESG also play a role. In an industry dominated by scientist-owned companies, public relations firms can lift the profiles of diverse founders and guide their path to VC funding.
A life sciences real and real estate PR firm should have a strong content arm specializing in thought leadership and segment expertise. Writers should be able to tell the brand’s story without blatant promotion, driving content placement to demonstrate the client’s market position and expertise. Op-ed essays and contributed content for specialist publications provide great PR for a life sciences real estate project and build an expert reputation for executive leaders.
Another PR component is localization—tying a life sciences company’s initiatives to media in its anchor hub, is part of the assignment. While life sciences is a global industry, real estate always is about location.
Smaller PR agencies that represent life sciences real estate tend to place emphasis on startup life science businesses than on real estate. Chicago’s Purpose Brand exercises its expertise in both arenas. People often ask, “Should I only hire a player that had done life sciences marketing?” Experience is valuable, but in a cutting-edge field it is more important to partner with a marketing innovator.
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