New Development Patterns Emerge in a Tight Life Science Market in DC
Available life science space in Shady Grove and Gaithersburg, the traditional core of the Maryland life science industry, is dwindling.
March 25, 2019
- Available life science space in Shady Grove and Gaithersburg, the traditional core of the Maryland life science industry, is dwindling with only six existing buildings offering available blocks of space larger than 20,000 s.f.
- Currently, combined vacancy for life science space hovers just below 4.5%. Plus, traditional office and flex buildings with high ceilings and utility capacity needed have become scarce, limiting the conversion opportunities that have been a mainstay in the market. Beyond that, strong real estate demand within this sector, which has exceeded one m.s.f. over the past three years, pending future tenant move-ins, which total 400,000 s.f. and perennially high levels of venture capital and NIH grant funding, have substantially increased investor demand for the last plots of vacant and underutilized land for future development.
- As demand has increased, land opportunities in the core life science market have become limited and developers and users are responding to evolving demographic and talent shifts, the future pipeline now includes developments both to the north and south of the existing core.
- Kite Pharma recently purchased 20 acres in Urbana for a new 279,000-s.f. R&D, manufacturing, and distribution center. The company will join Thermo Fisher and MedImmune, which also have facilities in Frederick County.
- South of Shady Grove, StonebridgeCarras is planning to break ground this year on 175,000 s.f. of lab space in downtown Bethesda at 8280 Wisconsin, the first urban and vertical lab space across Metro DC.
- Leasing at 8280 could prove telling for the future of Montgomery County’s life science industry as other major life science clusters nationally tend to have both a suburban and urban core. In Cambridge, MA, the nation’s #1 life science cluster, 78% of the supply is in urban areas. Could Montgomery County’s life science industry trend urban and move south along I-270 to reap the benefits of urban talent coupled with close proximity to NIH?
Source: JLL Research