Denver and Boulder have ranked for the first time among CBRE’s list of the largest U.S. life sciences markets, in its new report on the sector.
“Breaking into the ranking of top U.S. life sciences hubs is a big milestone for the Denver-Boulder area. Key mergers by industry leaders have brought a steady influx of life sciences talent to the market, and more companies and investors are turning their attention to our region as a strategic place to grow and invest,” said Brian McClenahan, vice president with CBRE in Boulder.
Nationally, the life sciences sector has reached new highs this year in R&D employment and venture-capital funding. Those and other factors have resulted in a surge in demand for life sciences real estate in markets from longstanding centers like Boston and the San Francisco Bay Area to emerging hubs such as Pittsburgh.
“Many local companies have pivoted or expanded their business to assist in the pursuit of a COVID-19 vaccine, putting life sciences at the front and center of innovation in Colorado and nationally.”
The Denver-Boulder area has attracted significantly more venture capital funding over the past few years, culminating in a new record of $310 million for the year ending Q1 2020. Denver-Boulder also ranked 18th in the nation for National Institutes of Health (NIH) funding last year. The market has relatively low lab vacancy (7.8%), which is expected to fall further over the next year, pushing rents higher. The vacancy rate is declining due to increased demand for lab space.
Life sciences companies are currently searching for 800,000 square feet of lab space in the Denver-Boulder area. Several projects in the construction pipeline are aiming to alleviate some of the demand, including The Max in Longmont, a speculative conversion of an office building to labs.
“We’ve seen a tremendous increase in demand for life science facilities, from small R&D wet lab through full scale GMP manufacturing. A highly educated work force, a desirable quality of life and the ability to build ground up or reposition existing buildings has made Boulder County a target for life sciences companies, property developers and institutional investors. We continue to see demand outpace supply and anticipate this being a trend through 2021,” said Erik Abrahamson, first vice president with CBRE in Boulder who is marketing The Max for lease.
