Focus

Emerging markets saw spike of life sciences VC investment in 2022

Bisnow – February 3

Last year’s solid venture capital investment in life sciences was, as expected, focused on the big three markets of San Diego, Boston, and San Francisco. But as a recent Cushman & Wakefield report found, emerging markets saw significant spikes of interest, perhaps suggesting a shift toward building startups and more lab space outside established markets. Some nascent centers of biotech investment saw big years, bolstered by a handful of headline-grabbing deals: Denver received an influx of $486.6 million, up 6 percent; Austin startups nabbed $345 million, up 80 percent; Minneapolis firms raised $275 million, up 26 percent; and Atlanta saw $86 million, up 2 percent.

News

How vacant office spaces get new life

Commercial Property Executive – January 16

With an increasing amount of vacant office space hitting the market as companies rethink their real estate needs in the post-pandemic environment, more commercial real estate industry players are pursuing repurposing projects to capitalize on the unutilized workspace square footage. Multifamily, industrial, life science, hospitality—the conversion options are diverse, and the number of projects is on the rise. Although multifamily has long been the leading choice for office conversions, the sector may soon drop to second place. Of the 125 CBRE-tracked office conversion projects currently underway, 50 percent are being redeveloped as life science destinations.

Healthcare investors poised for increased M&A activity in 2023

McKnights Senior Living – January 10

Sixty percent of healthcare and life sciences investors are planning to increase their mergers and acquisitions activity in 2023 despite economic pressures, and a fourth of respondents to a recent survey expect to do at least 10 percent more deals in 2023 compared with 2022, according to the 2023 KPMG Healthcare and Life Sciences Investment Outlook. The results of the survey show a pent-up demand for portfolio shaping, consolidation, and strategic partnerships that could lead to a resurgence of M&A in 2023, KPMG said. Private equity will be the major driver of M&A activity in the year, according to the survey results.

San Diego’s life sciences real estate market normalizes in Q4 after robust growth in previous two years

San Diego Metro – February 2

New supply of life sciences real estate outpaced demand in the fourth quarter in many top U.S. life sciences markets, including San Diego, boosting the sector’s vacancy rate back toward pre-pandemic levels, according to national and local reports from CBRE. The core submarkets of Torrey Pines, UTC, Sorrento Mesa, and Sorrento Valley led in leasing activity with 98,490 square feet of lab space leased in the quarter. However, overall leasing activity declined from 353,474 in the third quarter to 134,873 in the fourth quarter.

Deals

Gilead to build 175K-SF research facility at Foster City campus

The Real Deal – January 18

Drugmaker Gilead Sciences aims to build a 175,000-square-foot research center at its campus headquarters in Foster City. The biopharmaceutical company would add the six-story R&D building to its 3.1 million-square-foot campus at 333 Lakeside Drive, the San Francisco Business Times reported. The addition comes as the maker of HIV, hepatitis C, and cancer therapies expands its pipeline of potential drugs, a portfolio boosted by acquisitions, collaborations, and internal research.

$1B Bay Area life science campus gets $373M loan

GlobeSt.com – January 23

Lane Partners and Goldman Sachs have secured $373 million in financing for the construction of the first phase of Southline, a 3 million-square-foot mixed-use life science campus the company is developing in South San Francisco. Square Mile Capital Management originated the recapitalization package for the first phase, encompassing 715,000 square feet, with Bank OZK providing the senior portion of the loan in a transaction arranged by Eastdil Secured.

NexPoint envisions a $3B life sciences campus in Plano, with the city’s help

The Dallas Morning News – January 30

The empty former headquarters of H. Ross Perot Sr.’s legendary Electronic Data Systems in Plano could one day become a hub for companies creating life-saving technology. Dallas-based NexPoint says it is ready to invest over $3.6 billion in an ambitious plan to turn the existing 1.6 million square feet of office space into a life sciences complex. And it wants the city to partner with it, possibly by tapping into Plano’s economic development incentive programs supplying tax breaks and cash grants to assist in readying the campus for a new use.