For New York to truly fulfill its life sciences potential, it needs more laboratory space: Crain’s New York

Crain’s New York Business
For New York to truly fulfill its life sciences potential, it needs a lot more laboratory space

By Jonathan Schifrin

This summer, the New York City Economic Development Corporation announced that New York now tops the US in life science jobs and funding, surpassing longtime industry leaders in Greater Boston and San Francisco Bay Area. The city is home to over 150,000 jobs in the sector and more than 5,000 biotechnology businesses. It’s a milestone that caps a decade of leadership from both the government and private sector to make New York a global public health research hub, including the City’s $1 billion commitment to boost the industry.

For years, policymakers have reinforced the growth of a sector that builds naturally on the assets that New York has always possessed: a large and diverse talent pool, world-class academic research institutions, and a steady flow of venture capital funding. One of the last remaining hurdles to supercharge the life science industry in New York is the need to accommodate for the exceptional demand in laboratory space.

As of 2021, New York City still had below 2 million square feet of lab space. Smaller cities like Boston and San Francisco offer life science users exponentially more supply—with over 30 million square feet in both markets. Closing that gap is an urgent challenge, especially when demand is skyrocketing. Leasing exceeded 400,000 square feet in 2021 compared to just over 150,000 square feet in 2020.

The good news is that developers have been stepping up in New York, where the overall square footage of space is set to nearly triple to more than 5 million by 2028, according to CBRE’s Q3 2022 NYC Life Sciences Market Report.

Current market trends in New York are similar to what our firm has seen happen in Boston, San Francisco and San Diego—rapid growth leading to market saturation in the initial clusters followed by the outward spread of the ecosystem. Just as MIT spurred the initial life science concentration in Kendall Square which then spread to the Seaport, the renowned Manhattan healthcare corridor is expanding to the city’s other boroughs.

Long Island City has emerged as a particularly attractive location for life science companies, taking advantage of the accessibility to the City’s academic and research institutions and the available space being created in former industrial facilities.

One of the newest projects that is set to come online in Long Island City is Hatch Life Sciences. At 43-10 23^rd Street, Longfellow Real Estate Partners is converting this former creative office building to 214,013 square feet of lab-ready space – set to begin pre-leasing by Q1 2023. In addition to upgrading the base building systems, Longfellow will add amenities on the first floor and 70,000 square feet of pre-built lab suites.

Gensler’s project principal on Hatch Life Sciences, Tom McGoldrick, added, “As we continue to see the repositioning of office and manufacturing buildings to expand research-capable programs in New York, we are helping our clients differentiate their real estate by prioritizing resiliency, flexibility, and wellbeing. When you combine those elements with tenant curated amenities, like Longfellow’s Elevate program, the building becomes a destination.”

The growth of New York’s life science industry represents a generational economic opportunity. Realizing this potential will take collaborative efforts, with developers partnering with local institutions, government agencies and community leaders and residents. Life science may prove to be the defining industry of this century — one with the potential to create transformative public health benefits while creating thousands of jobs for our community.

~ Jonathan Schifrin is a Senior Vice President in CBRE’s Advisory and Transaction Services Group in New York City.

(Courtesy of Crain’s New York: https://www.crainsnewyork.com/op-ed/new-york-needs-more-lab-space-fulfill-life-sciences-industrys-needs)