Greater Boston, San Francisco Bay, San Diego Are Top Life Sciences Markets

JLL’s 2023 Life Sciences Industry and Real Estate Perspective explores the state of the life sciences industry, and identifies trends and opportunities.

Greater Boston, the San Francisco Bay Area, and San Diego once again reign supreme as the top three markets for life sciences commercial real estate in the U.S., according to a new report from JLL. Rounding out the top 10, respectively, are Greater DC and Baltimore; Raleigh-Durham, NC; New Jersey; New York City; Boulder and the Northwest Corridor; Philadelphia; and Seattle.

JLL’s 2023 Life Sciences Industry and Real Estate Perspective explores the state of the life sciences industry and identifies trends and opportunities for current and future lab space demand, along with the annual ranking of the top innovation communities. The report also includes two new cluster rankings that reveal the five top markets for both medical technology (medtech) and biomanufacturing.

life sciences
(Photo: Adobe Stock / Wangs)


Three main components comprise a successful life sciences ecosystem, according to JLL Research:

  • Access to talent
  • Funding that leads to commercialization
  • Real estate infrastructure that supports current activities and further growth

“The elements that are mission critical for young startups to grow are numerous, and, while the top 10 markets provide what is necessary for the discovery and clinical stages and house the highest concentration of VCs with deep industry knowledge, new markets like Los Angeles, Chicago and Houston are showing signs of significant growth and potential,” said Maddie Holmes, Senior Research Analyst, Life Sciences Industry Insight and Advisory, JLL. “These emerging clusters are attracting investments from universities, institutions, governments and industry players who recognize the importance of fostering breakthrough scientific developments.”

Medtech And Biomanufacturing Rankings

The life sciences industry is more than the development of new therapeutics; it involves other life-impacting scientific endeavors such as medical devices and technologies and biomanufacturing, which are key drivers of the overall industry’s evolution. The long-term growth prospects for both medtech and biomanufacturing are exceptional, according to JLL. Given the significant capital investments and the pivotal role of manufacturing operations in a company’s success, choosing locations and sites with long-term value and optimal deployment is imperative.

Given the significant capital investments and the pivotal role of manufacturing operations in a company’s success, choosing locations and sites with long-term value and optimal deployment is imperative.

Through complex analysis focused on variables specific to medtech and biomanufacturing, JLL Research uncovered the top five markets that show strength in these specific subsectors. Skilled talent and its growing demand, innovation measured by clinical trials and venture capital funding, and industry performance and concentration were among the evaluated factors.

For medical technology, Orange County, California is the top-ranked market due to its presence of renowned academic and research institutions, support of the local government, and industry associations and strong venture capital (VC) presence. Minneapolis-Saint Paul, MN; the San Francisco Bay Area; Greater Boston; and Salt Lake City comprise the remaining top five clusters, respectively.

When it comes to the top biomanufacturing market, JLL designated Raleigh-Durham as the leader. The area is “uniquely positioned due to the history of large-scale biomanufacturing in and around Research Triangle Park and the outlying counties, large talent pool, and three tier-one universities.” Philadelphia, New Jersey, Greater Boston, and the San Francisco Bay Area make up the rest of the top five, respectively.

“Medical device and testing companies represent a huge swath of the life sciences landscape in the U.S., and biomanufacturing is a critical piece of a therapeutic company’s lifecycle,” said Mark Bruso, Research Director, New England and U.S. Life Sciences, JLL. “Markets that specialize in these fields and have high concentrations of talent are not necessarily the same as traditional R&D hubs, so it was important for us to shine a light on the strongest medtech and biomanufacturing hubs in the country for the first time.”

Life Sciences Commercial Real Estate Market

The top 20 VC firms focused on life sciences have raised over $22 billion collectively since 2021 that will soon find its way into growing startups, according to the report. With ample funds to close deals, the rest of 2023 will likely see mega M&A deals for companies with top-notch science deep into their clinical trials.

“The relationship between funding rounds and startup expansion are symbiotic, driving growth throughout the biotech sector, and, while the public markets have slightly cooled off, private capital remains hopeful with record dry powder from top VCs focused on life sciences,” said Travis McCready, Head of Life Sciences, Americas Markets, JLL.

The supply landscape shifted dramatically over the past 18 months, proving how sensitive the biotech sector is to microeconomic forces. At the end of 2021, demand across the top eight markets in the U.S. was more than 25 million square feet. By mid-2023, that had fallen to just over 10 million square feet.

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Throughout 2023, small biotech occupiers with a critical need for bench space have been the largest seeker of new space, as opposed to mid- to late-stage companies that can pause expansion plans and operate within their current space, according to JLL. Sub-30,000-square-foot tenants accounted for 82% of deals signed in the first half of 2023, up from the previous average of 65%.

“Established pharmaceutical companies and biotechs have the chance to strategically select long-term markets for R&D growth,” said Kevin Wayer, President, Life Sciences, Work Dynamics Division, JLL. “It’s the perfect opportunity for larger companies to analyze their real estate portfolios and facilities and make informed location choices, as well as for growing companies and startups seeking to scale. It marks a new era of strategic decision-making in the life sciences industry.”

Check out all latest economic development, corporate expansion and site selection news related to the life sciences, biotechnology and pharmaceutical industries.


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