The pandemic has accelerated momentum in the U.S. life sciences industry, particularly amid the race to produce a COVID-19 vaccine and develop other medicines for human ailments.That has meant more growth for metros like Philadelphia, which ranks seventh on CBRE’s list of the largest U.S. life sciences markets in its new report on the sector.

Nationally, the life sciences sectorhas reached new highs this year in R&D employment and venture-capital funding. Those and other factors have resulted in a surge in demand for life sciences real estatein markets from longstanding centers like Boston and the San Francisco Bay Area to emerging hubs such as Pittsburgh, according to a new report from CBRE.

Several metrics support Philadelphia’s ranking; Philadelphia had one of the biggest increases in life sciences employment ofany U.S. market between 2018 and 2019, up by 5.7% compared with the

4.2% national average; Philadelphia has been one of the fastest-growing markets for venture capital

funding, totaling $791 million over the past year—an increase of 83% fromthe prior year; Philadelphia ranked sixth for NIH funding in fiscal year 2019, totaling$1.1 billion; and demand for life sciences space has surged over the past 18 months, with triplethe number of tenants seeking lab space.

“Philadelphia’s uniquely concentrated academic, healthcare and research institutions, coupled with a deep and experienced life sciences workforce from the longstanding presence of big pharma, have all contributed to significant growth of the local life sciences market,” said Bob Zwengler, Executive Vice President, CBRE. “Increased activity from institutional investors, local and out-of-market companies, and venture capital deal volume is reflective of Philadelphia’s emergence as one of the top locations in the world for cell and gene therapy research.”

CBRE identified the top U.S. life sciences markets by assessing each market’s life-sciences job base, the size of its lab-space inventory, and the amount of funding it attracts from venture capital firms and the National Institutes of Health.

Largest U.S. Life Sciences Markets

CBRE’s determined its list of emerging life-sciences markets through a slightly narrower set of criteria. Those markets are (in order): Pittsburgh, Houston, Austin, Detroit, Phoenix, Dallas-Fort Worth, St. Louis, Atlanta, Portland and Minneapolis.

Overall, the life-sciences industry is building on its momentum. Venture-capital investment in the sector grew to a rolling annual total of $17.8 billion in the second quarter, the largest amount on record, according to the PwC/CB Insights MoneyTree survey. Employment in U.S. biotechnology research and development professions exceeded 220,000 in July, extending a decade-long growth trajectory.

Investors continue to consider lab and R&D space to be slightly more valuable on average than conventional office space, a trend that began in 2015. Lab-space vacancy is less than 8 percent in many top life sciences markets and rents are rising in most.

“Nearly every indicator points to increasing demand for life sciences real estate in the U.S., be it expanding R&D employment, public and private investment in combatting the pandemic, or the health needs of our aging population,” said Ian Anderson, CBRE Americas Head of Office Research. “The factors fueling this sector are great enough to support demand for more lab space in the top markets and beyond.”

To read the full report, click here.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.