New York City’s life sciences real estate has boomed in recent years, but the region needs to invest in infrastructure if its market is going to rival that of San Francisco and Boston.
That’s the argument that Partnership Fund for New York City president Maria Gotsch made in comments to the New York Business Journal.
“There is so much incentive as it currently stands to make a discovery here in New York City at either Columbia or NYU, for instance, but bring it to the market as a private company somewhere else,” Gotsch told the outlet. “We’re not trying to bring companies from San Francisco or Boston, but convince their founders to never leave New York in the first place.”
A joint report from the City of New York and the New York Economic Development Corporation published this month noted the city’s 150,000 life sciences jobs beats out San Francisco by 14,000 and its 5,000-plus companies is 30 percent greater than Boston.
Still, Boston and San Francisco remain the top cities for space demand in the sector. A December report from CBRE showed Boston-Cambridge as the leader in inventory with more than 42.1 million square feet. San Francisco was a distant second at the time with 32.7 million square feet of inventory.
New York City, however, was tied with Boston-Cambridge for the lowest vacancy rate among major markets at 1.1 percent. It was also second in triple-net lease average asking rents at $89.92.
Last year was a banner period for life sciences in the city. According to CBRE, tenants in the sector leased 433,000 square feet, a record. The figure was nearly triple the volume of leasing in the sector in 2020 and exceeded all of the leases in the sector combined over the previous seven years.
More physical infrastructure to support these companies is also on the way. CBRE reported that 860,000 square feet was under construction during the fourth quarter. The firm projected the market would have 4.6 million square feet of space solely for lab users by 2025.
One development to keep an eye on is 43-10 23rd Street in Long Island City, Queens. In December, Longfellow Real Estate Partners bought a majority equity interest in the 200,000-square-foot property for $95 million, planning to invest another $120 million to turn it into a state-of-the-art life sciences facility.
[NYBJ] — Holden Walter-Warner