A panel discussion was held by Bisnow's Bay Area Life Sciences & CRE in San Francisco last month. Among the panellists are some of the Bay Area’s life science real estate leader: Gavin Keith of DPR Construction; Gregg Domanico, Executive Vice President and Managing Director of Kidder Mathews; Terry Stelter of AlfaTech; David Bendet, Managing Director for Life Sciences of CBRE; Neil Fox, CEO of Phase 3 Properties; Mike Jackson, Vice President of Operations of Truebeck Construction; Tracy Murphy, Executive Vice President of Kilroy Realty Life Sciences; David Braunstein, Vice President of Seavest Healthcare Properties; Kirk Syme, President of Woodstock Development; Geoffrey Sears of Wareham Development; Mike Futrell of South San Francisco City Manager; and Lisa Strope, Vice President and Director of Research of JLL. The discussion revealed that all panellists agreed that recently there is a seemingly insatiable demand of space from life science startups.
According to JLL Vice President and Director of Research Lisa Strope, life science had a good year in 2018. The San Francisco area attracted $5B in venture capital, topping Boston's market for the first time ever. The region's life science market has 25% job growth over the last five years, more than double the nationwide 10%.
The robust life science industry development is evidenced by a low 3.54% vacancy rate in San Mateo County; and a regional demand of 3.8 M SF of life science space with anticipated rising rent, as mentioned by Kidder Mathews’ Executive Vice President Gregg Domanico. He said:
“The demand for space under 10K SF is extremely high”, and
“It is possible for real estate developers getting into that business”
Domanico further explained that, of the $7.3B of venture capital that went to Bay Area life sciences, almost $800M went to companies in seed capital or Series A or B funding, resulting startups are looking for space that suits their needs.