The outlook for life sciences real estate activity in NYC is good.
Ariel real estate advisor
New York City has always attracted talent and is a hub of progress. And yet, while New York has one of the highest numbers of STEM talent each year, the city ranks only sixth in the life sciences – behind the Bay Area, Boston, and the Research Triangle in North Carolina’s Raleigh / Durham region, other U -Bahn areas.
Now New York has caught the eye. Mayor de Blasio launched a $ 1 billion investment in the industry in hopes that LifeSci NYC would bring more businesses to the five boroughs created to build New York City as a leader in life sciences. The recent momentum in office development and rental activity suggests New York will climb the rankings – and the diversification of the life sciences segment is changing the dynamism of the city’s commercial market.
Important growth figures for life sciences
At the national level, the life sciences industry defied lagging employment trends, growing 1.4%, while total employment declined 5.1% from 2019 to 2020. Venture capital financing in the industry also hit a new high of $ 10 billion in the first quarter of 2021, doubling investments from the prior-year quarter. In addition, the demand for life sciences and laboratory space increased dramatically in New York in the first quarter of this year. Even during the pandemic, NYC recorded over $ 900 million in venture capital investments in the industry, the second highest total value ever, along with annual increases in rental and leasing activity. Overall, employment in the industry has increased 67 percent since 2001.
New York City numbers suggest strong growth
New York City leads not only in STEM graduates, but also a leader in life science professionals, but only ranks seventh in space available or under construction for this type of work. In terms of investment and space for the life sciences industry, New York City lags behind some other cities. According to the Times, only 2 million square feet of Manhattan are used for this type of research, while Boston is 30 million square feet that are demarcated for this purpose. Although over 30 percent of the buildings in the city are available for use or conversion into laboratory space, less than 3 percent can be used functionally in this way.
Location requirements in the life sciences sector create new markets
Life science companies require proximity to universities, colleges and hospitals, so location is crucial. Because of this, the industry is finding that these ideal environments for life sciences tenants are reshaping New York’s midtown and financial district-centric office ecosystem. While some life sciences laboratories have settled on the outskirts of Midtown, such as the Hudson Research Center near Hell’s Kitchen, Cure by Deerfield Management in the Flatiron District, and the Alexandria Center in Kips Bay, the demand for life sciences is high space draws new attention to city districts. Long Island City is home to Innolabs, which is being developed by King Street, while West Harlem is the hub of Janus Property Company, which is providing life sciences space in multiple buildings in the Manhattanville Factory District, a master-planned commercial development.
With so many developments underway or already completed, the life sciences market will continue to grow rapidly after the pandemic. Designated space for life sciences buildings is both a necessary and an important investment for owners. From powerful backup generators and air ducts to garbage disposal functions and air conditioning, laboratories require a great deal of foresight and planning from owners and developers. This premise contributes to the trend that will shape New York’s commercial office market in 2021 and the flight to quality as top tenants look for space in Trophy-class buildings that have seamless digital infrastructure, cutting edge technology and turnkey spaces offer and present co-branding opportunities for sustainability and design.
West Harlem is home to a growing life science movement.
Ariel real estate advisor
West Harlem’s expanding innovation ecosystem
West Harlem presents a fascinating case study because it wins a large chunk of life sciences leases. The youngest tenant, Hämogenyx, is one such tenant. In a statement by its CEO and founder Dr. Says Vladislav Sandler, “I have personally toured all of the life sciences options in the New York City area and the choice for the continued growth of our laboratory was clear. With multiple current and future vivarium options, the ability to work with Columbia University and City College, the exceptional location for my multi-location staff, and Janus’ dedication to both the life sciences industry and our company in particular, the Mink Building represents a perfect combination that is second to none. “
“The innovation corridor in West Harlem from the Morningside campus of Mount Sinai to the historic Columbia University campus and the Manhattanville extension to City College and the New York Structural Biology Center to the New York Presbyterian and Columbia University Medical Center is simply unmatched in New York City Said Scott Metzner, Principal, Janus Property Company. Metzner and his fellow Janus director Jerry Salama created one of the largest life sciences / innovation districts in New York.
“The combination of West Harlem’s location with the quality of construction and the economic advantages is unique,” says Metzner. “In addition to direct access to young STEM talents at the Columbia and CCNY locations, our West Harlem location is not only the cheapest life science district for New Yorkers and those coming from New Jersey, Upstate or Connecticut, but also a wonderful and New one York standards, affordable place to live and work, with flourishing retail and culture. ”
In addition to Hemogenyx, Janus has won numerous laboratory, medical and related tenants including Harlem Biospace Incubator, Quentis Therapeutics, Volastra Therapeutics, Renal Research Institute, Quicksilver Therapeutics, Hypothekids, BioBus and a facility in New York State. Janus recently completed the Taystee Lab Building, a 350,000 square meter lettable new building, a LEED certified life sciences building and the 200,000 square meter Malt House. (The unique names of the buildings reflect their earlier life as a brewery and pastry shop. All of the locations were mostly empty or abandoned and Janus has worked extensively with the community, engineers and landscape architects to preserve and integrate as many buildings as possible into one open, unguarded urban campus)
“What is important is that West Harlem has a world-famous, robust art, culture and non-profit scene that coexists with our MINT tenants,” says Salama. “The Studio Museum is here, as is the Harlem Stage, the Apollo Theater, SoHarlem Creative, the Lenfest Center for the Arts, the Wallach Art Gallery and soon the Urban Civil Rights Museum. There is tremendous excitement over all of the growth that has occurred even during the pandemic. It all comes together at the same time! “
New York is rapidly expanding its life science industry, as noted, and while the market has not yet reached the high Boston set, this year is an important gauge of the advances the market has made of late. With a combination of important factors, namely available talent, industry expansion and openness to further developments as well as laboratory space, the market should remain robust and resilient in the future. Today more than ever, companies are looking for first-class, high-quality space as well as energy- and eco-efficient options in the midst of an active life sciences landscape.