Startups

Philly is the 5th-ranked life sciences cluster in this new JLL report

Amid shifts in national trends for real estate, venture capital and talent, the local industry remains strong.

A view of the biotech industry. (Photo by Flickr user ibmphoto24, used via a Creative Commons license)
As venture capital and talent markets and the economy at large continue to evolve in 2022, so does Philly’s life sciences industry.

A new report from real estate services firm JLL analyzing the research outlook and strength of life sciences hubs around the country just named Philadelphia No. 5, up four spots from 2021.

“Most of this report has focused on what has changed in the past 12 months, which in most cases represented a downshift from one year ago,” the report begins. “Year-to date this has been one of the more trying years in recent memory for a sector that has had incredible growth in both the technology itself and investor interest in developing it. The short-term path for the sector will certainly look much like it has this year: belt-tightening, a difficult funding environment and increasing personnel and research costs.”

The report looks at a few factors, including the region’s available talent, funding and commercial real estate. Philadelphia ranked eighth across the board for each category, only scoring lower than Boston, San Francisco, San Diego and the DMV overall.

Its big pluses are that Philly is “home to a deep and growing pool of talent coming from the region’s strong universities,” the report said. But despite being a national leader in cell and gene therapy, the region has “not added much inventory in the past few years to accommodate that growth.”

See the report

Joe Colletti, EVP at JLL, said the Philadelphia market is well-positioned for greater growth in the coming years, with millions of square feet in lab space expected in the next 12 to 24 months already in progress.

The report pulls out some key findings about national trends in the last year in life sciences. Following a VC market slowdown in early 2022, startups are now focused on conserving capital, the report said. It predicts this conservation will be short lived, as VC in general is still up from years past. (More on local and national Q3 VC trends here.) Though many companies are waiting to go public or make other big moves this year, $21.5 billion has still been invested in life sciences between January and August of this year.

The demand for commercial real estate is also slowing, JLL found. Many regions, like Philadelphia, hit a peak in demand for lab and mixed-use office space in 2021, and this year, companies are slower to sign leases, or are re-signing existing leases.

Yet short-term challenges are expected to pass:

“The life sciences industry was catapulted into the public’s consciousness amid COVID-19, and with it came an overheated sector with sky-high valuations, plentiful capital and new entrants into the development and investor spaces,” the report said. “2022 has felt like a splash of cold water, reining in the excesses of 2021 and bringing the sector back down to earth and back in line with its pre-2021 long-run track.”

Companies: JLL

Before you go...

Please consider supporting Technical.ly to keep our independent journalism strong. Unlike most business-focused media outlets, we don’t have a paywall. Instead, we count on your personal and organizational support.

Our services Preferred partners The journalism fund
Engagement

Join our growing Slack community

Join 5,000 tech professionals and entrepreneurs in our community Slack today!

Trending

16 places to responsibly dispose of old electronics in Philadelphia

19 tech and entrepreneurship events to check out before the holidays

Expect high-speed internet at 100 Philly rec centers in 2025, Verizon says

Are digital navigators the answer to closing Philadelphia’s tech gap?

Technically Media