7 insights on Maryland’s life sciences sector right now

Recent commercial real estate insights on Maryland’s life sciences industry emphasize universities as development drivers, but also highlight challenges such as a “volatile” national market.

These insights are drawn from “Maryland Life Sciences Observations” by real estate services company Jones Lang LaSalle (JLL), a new report developed by research analyst Graham Sessoms and research manager Kate Paine.

Despite the challenges, Paine sees some silver linings, she told Technical.ly via email.

“At large, market conditions in the past year have been particularly volatile — both nationally and locally,” she said. “But, if you look past the doom and gloom that can sometimes creep in from a short-term real estate perspective and recognize that while real estate market conditions may be temporarily challenging, Baltimore has a thriving life sciences ecosystem.”

Strengths in the Greater DC-Baltimore region — which ranked fourth on JLL’s 2023 Life Sciences Industry and Real Estate Perspective report — include its market size, substantial National Institutes of Health (NIH) funding, and a strong presence of jobs in research and development. Paine further underscored the region’s commitment to fostering innovation by noting more recent wins.

“Despite challenging market conditions in the short-term, Baltimore continues to reinforce the foundation of the life sciences economy,” she said. “The recent launch of Blackbird Laboratories, a $100 million fund that will offer grants to startups to build on successes of companies spinning out of the University of Maryland and Johns Hopkins, is an investment that will fuel company formation for years to come. Additionally, Baltimore’s recent designation as a Tech Hub will supercharge the region’s biotech ecosystem.”

Paine added that although these represent significant victories for Charm City’s life sciences ecosystems, these emerging companies and initiatives could face relocation pressures if an additional supply of lab space is not introduced to the market, citing cost of construction and market uncertainty as challenges to the development of lab spaces.

Here are seven more insights from JLL’s Q3 report:

• Baltimore’s Tech Hubs designation and an “equi-tech” focus might advance the development of predictive healthcare technologies that can contribute to clinical decision-making, bioethics, personalized medicine, new biologics, and therapeutics.
• Facilities should adapt to accommodate the growing use of technologies like robotics, automation technology and small-batch processing.
• While suburban Maryland plays a part, Baltimore city’s lab development pipeline is expanding with projects such as a development in South Baltimore with MAG Partners in Baltimore Peninsula, and East Baltimore Development, Inc. initiating a request to engage a private developer for the construction of a building within the Johns Hopkins Science and Technology Park. There are also some leasable opportunities, including in City Garage and BeMore Labs.
• Many administrative job roles in life sciences have moved to hybrid models, which might lessen a need for physical office space.
• Maryland organizations have received $1.4 billion in NIH awards so far this year. Regarding real estate: “While NIH funding fuels new ideas and innovation, it is not typically a catalyst for company formations and demand for space,” the report says.
• While there has been at least one ribbon cutting for a science center at a local university, there were no new groundbreakings in Q3 2023 for the life sciences sector. There is, however, tons of shovel-ready development available.
• The outlook for private capital investment in the life sciences sector is uncertain at the moment. But there is optimism as the top 20 venture capital firms specializing in life sciences have a significant amount of unused capital, which is expected to be invested in emerging startups in the near future.