New York City’s commercial spaces traded sports coats for lab coats as leasing in the life sciences shattered records in 2021.
Tenants in the sector leased 433,000 square feet in 2021, according to CBRE data reported by the New York Business Journal. The record amount marked nearly triple leasing in the sector from 2020 levels and exceeded all of the leases in the sector combined in the previous seven years.
As the life sciences sector continues to boom, availability is harder to come by and asking rents creeped higher. The average asking rent on triple-net life sciences leases in Manhattan was $114 per square foot last year, up $3 year-over-year. Meanwhile, the availability rate for ready-to-use lab space cratered to 3.3 percent.
Most of New York’s inventory for lab tenants is concentrated in Manhattan, which boasts 1.4 million square feet, but Long Island City and Brooklyn are growing in popularity with the sector.
More space could soon be on the way, as 860,000 square feet was under construction in the market during the fourth quarter. The Business Journal reported CBRE projects the market will have 4.6 million square feet of space solely for lab users by 2025.
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One example of New York’s growing life sciences sector can be seen at 43-10 23rd Street in Long Island City, Queens. Longfellow Real Estate Partners in December bought a majority equity interest in the 200,000-square-foot property for $95 million and plans to invest another $120 million to transform it into a state-of-the-art life sciences facility.
While New York’s market is growing, it still has a long way to catch up to some of the largest in the country. Boston and Cambridge count almost 45 million square feet of life science real estate and an availability rate of only 1.3 percent at the end of the fourth quarter.
[NYBJ] — Holden Walter-Warner