Austin Life Sciences Industry Boosted Amid Pandemic

AUSTIN, TX — The life sciences industry in Austin has grown in a time of pandemic as the race to produce a vaccine for the coronavirus is in full swing, according to a new report.

Accelerated momentum in the life sciences industry has been boosted at several emerging life-sciences hubs, including Austin, ranked third in the country for emerging life-science clusters, as outlined in a new report from CBRE.

Nationally, the life-sciences sector has reached new highs this year in R&D (research and development) employment and venture-capital funding. Those factors and others have helped to fuel a surge in demand for life sciences real estate in markets from longstanding centers like Boston to emerging hubs such as Pittsburgh, Houston and Austin, researchers found.

“Austin’s reputation as an exceedingly tech-friendly market coupled with an increase in R&D employment, the highest in Texas, from 2018 – 2019, make it a prime market for life science companies,” Nelson Udstuen, senior vice president at CBRE, said in a prepared statement. “As life-science companies seek to capitalize on the robust workforce in Austin and the overall high-quality of life that the city offers, the market is well poised for continued growth as an emerging life-science hub.”

Austin’s life-sciences industry ranks third in the U.S. on the list of top 10 emerging clusters, according to the findings. In addition, researchers found, the market ranks within the top 15 life science markets for venture capital investments.

CBRE’s determined its list of emerging life-sciences markets through assessing their size and growth of life-sciences employment, concentration of R&D employment in life sciences, and the venture capital and NIH funding they received.

Elsewhere in Texas, Dallas-Fort Worth and Houston also made the top ten list where the industry has seen growth in emerging hubs. The top ten, in descending order, are: Pittsburgh; Houston; Austin; Detroit; Phoenix; Dallas-Fort Worth; St Louis; Atlanta; Portland, Oregon; Minneapolis.

CBRE’s separate ranking of the top established life-sciences hubs includes, in order, Boston-Cambridge; San Francisco Bay Area; San Diego; Washington, D.C.-Baltimore; Raleigh-Durham; New Jersey; Philadelphia; New York City; Seattle; Los Angeles; Chicago; Orange County, CA.; and Denver-Boulder.

Overall, the life-sciences industry is building on its momentum, according to the findings. 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.

The findings also show 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, analysts found.

“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,” Ian Anderson, CBRE Americas Head of Office Research, said in a prepared statement. “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.