The life sciences market has been on fire over the last few years, and in New York City, last year was the best year yet for the sector. The city’s life sciences sector hit an all-time high in leasing activity in 2022, with 455,000 square feet leased, a 5 percent increase over the previous year, according to a new report from CBRE. Average rent in the city also reached an all-time high of $108.47 triple-net per square foot. The city’s availability rate for pre-built, ready for occupancy lab space dropped down to a tight 3.8 percent, despite a growth in the inventory of lab space last year from 1.9 million to 2.7 million square feet. New York City officials are making a big push to grow the city’s life sciences sector, most notably with LifeSci NYC, a $1 billion initiative focused on developing talent, expanding research, and building more biotech space.
The numbers are particularly striking given the recent pullback in venture capital to the industry. Last year, life sciences VC funding totaled $35.8 billion, a 28 percent drop from 2021 figures. The number of companies launching IPOs also plummeted sharply, with activity dropping 90 percent from $14.5 billion in 2021 to $1.4 billion in 2022, according to Cushman & Wakefield. The biotech industry has also not been immune to layoffs, with thousands of employees let go over the past few months as some companies shuttered for good. Industry leaders had predicted a more muted year for life sciences in 2023, and so far that’s turning out to be true. But continued scientific advances and research are expected to help continue to power growth and expansion in the sector for the foreseeable future.