CBRE Report: US Life Sciences Job Growth Often Signals Demand for More Labs
March 14, 2022
Strong job gains in the ranks of biotechnology researchers and lab workers in U.S. life sciences hubs often coincide with increased demand for life sciences real estate there, according to a new report from CBRE.
The latest U.S. Bureau of Labor Statistics data show brisk hiring in the life sciences sector. The sector’s headcount increased 5.3 percent in January from a year earlier, outpacing overall national job growth of 4.7 percent in that span. Even hotter is the subsector of biotech research and development, which notched 11.5 percent growth for the year.
This job growth has a direct impact on lab real estate. As an example, CBRE calculates a 93 percent positive correlation in the Boston-Cambridge market, the largest U.S. life sciences hub, between life sciences job growth and average asking rents for lab space. The Boston area’s life sciences employment grew to 104,000 in 2020 from nearly 81,000 in 2016. Meanwhile, the area’s average asking rent for lab space nearly doubled to $97.93 per square foot in 2021 from $52.16 in 2016.
CBRE has tracked a similar correlation in San Diego, indicating that the trend applies to other major life sciences hubs.
“Real estate often lags other economic and business measures. In the case of the life sciences sector, demand for lab space is the natural result of robust growth in jobs and in public and private funding in recent years, despite recently challenging equity markets,” said Matt Gardner, CBRE U.S. Life Sciences Leader.
“The life sciences sector has a tendency to follow a different cycle than the economy in general,” he said. “Society often turns to science to respond to big challenges, from disease to energy to food. All these signals point to continued high expectations for innovation in the life sciences going forward.”
Another factor helping to fuel the sector: The U.S. produced an annual increase of roughly 5,000 biological and biomedical engineering graduates from 2015 to 2020. That outpaces the annual increase in jobs in that field of study in that span, meaning the influx of new talent can easily sustain the industry’s strong job growth.
To read the report, click here.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of 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.