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News release

RALEIGH, NC

Mid-tier and Specialty Life Sciences Companies Drive Demand in Raleigh-Durham

JLL highlights industry shift in latest Raleigh-Durham Life Sciences Outlook


​RALEIGH, Apr. 1, 2014 – It’s no secret that Raleigh-Durham, more specifically The Research Triangle Park (RTP), is a mature, established cluster for the life sciences industry.  However, the familiar landscape is about to change according to JLL’s 2013 - 2014 Raleigh-Durham Life Sciences Outlook.

Across North America, activity and demand within the life sciences industry seems to have shifted from one driven by large companies, to one where mid-tier companies and specialty players are experiencing stable growth, and highly variable needs in response to promising products and treatments.  While the larger life sciences players might not be enjoying the same type of growth, their need for strategic portfolio planning is at an all-time high.  Although markets, such as Raleigh-Durham, with traditional headquarter campuses have reported upticks in vacant space with consolidating operations, opportunity exists in retrofitting and parceling large campuses to meet the growing needs of the mid-tier and specialty life sciences companies.

“Going forward, we expect firms directly and indirectly connected to the life sciences sector to grow,” says Mehtab Randhawa, Raleigh Research Analyst at JLL.  “The Research Triangle Foundation’s recent acquisition of Park Center will hopefully be able to foster that kind of growth.”

Over 27,000 people in the Raleigh-Durham area are employed across more than 800 life sciences establishments, the majority of which need and currently use lab space.  The RTP has a two-tier lab market, with modern facilities leasing in the $17.00 to $20.00 NNN per square foot range and dated facilities, roughly ten to 25 years in age, leasing in the $12.00 to $16.00 NNN per square foot range.  The existing supply of top-tier lab space is fast diminishing due to the strong demand of advanced technology facilities.  

“Companies requiring this kind of space will likely need to pursue build-to-suit opportunities,” Randhawa said.
The overview states that the biggest challenge the area’s industry faces is the lack of funding for start-up research and development firms.

“As the economy improves, however, investors will be looking to firms in the area with strong growth potential,” Randhawa said.  “We expect to see more M&A activity, eventually leading to real estate consolidations.”

For more market resources on the Raleigh-Durham area, please visit our research page.

About JLL
JLL (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $4 billion, JLL operates in 75 countries worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3 billion square feet and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $47.6 billion of real estate assets under management. For further information, visit www.jll.com.