In the midst of what’s on track to be the Philadelphia’s regions best year for venture capital deals ever, life sciences are making a strong showing, too.
According to a new report from CBRE, raised $777 million in venture capital in just the first half of in 2021, already eclipsed the total of the last two respective years — and the report makes a case for local life sciences activity reaching $1.4 billion this year.
CBRE EVP Bob Zwengler attributes growth in the life sciences industry to formerly incubator-based companies finally branching out on their own, coupled with local gene and cell therapy developments.
“The growth in life sciences has been over the last several years,” he told Technical.ly. “Companies that were in incubators over the last few years or in small spaces have emerged from what they were affiliated with before. As science begins to advance, we need more space. Once they raise money, they really need to grow.”
Aside from gene and cell therapy putting Philly amid national science discussions, the city has historically been a hub of medical and scientific innovation, Zwengler said. (You know — eds and meds.) He added that Philly entered 2021 as the seventh-biggest life sciences market in America.
Lab space devoted to the life sciences has become a major occupant of commercial real estate in the region. Life sciences leasing increased from 2019 to 2020, and so far 2021 is on track to at least meet last year’s amount: Philly saw 400,000 square feet in the first half of this year, compared to 800,000 square feet in the entire year of 2020. Significant leases signed by the likes of Spark Therapeutics and Century Therapeutics — which lives in the soon-to-be-expanded CIC Philly — within the last year have contributed to the trend.
As life sciences businesses grow locally, finding space for new firms has become a new concern. Zwengler is hopeful that once projects like University City’s UCity Square are complete, there will be more room for these companies’ employees to work. Beyond University City, there are local life science clusters in Philly’s Navy Yard, Exton and West Chester, King of Prussia, and Horsham and Willow Grove.
“I think we’re in a pretty good position,” Zwengler said. “It’s an attractive area to live in, more affordable than Boston, New York or the DC area. Many younger lab employees live in the city.”
Jobs were one sore spot in the report. From 2019 to 2020, life sciences employment in the region declined by 1.3% to 49,545 jobs. But positioned against an overall employment decline of 6.3% for the region during that same period of time, CBRE counts it a relative win. Meanwhile, R&D employment within the life sciences industry went up by 1.9%.
Michael Butler is a 2020-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.