The Biden Administration recently unveiled its plans to invest a total of $2 billion in the biotech sector in order to spur more development of manufacturing in the US. The investment was announced as part of an executive order aimed at boosting the country’s biotech and biomanufacturing industry in order to become less dependent on foreign manufacturers. With the initiative, the government is looking to “lower prices, create good jobs, strengthen supply chains, improve health outcomes, and reduce carbon emissions,” according to the White House’s announcement.
Several government agencies and departments will fund initiatives to grow the country’s biotech and biomanufacturing sectors, including the Department of Energy, the Department of Health and Human Services, and the Department of Defense, which will invest $1 billion over the next 5 years for bio-industrial manufacturing infrastructure, with an additional $200 million earmarked for biosecurity and cybersecurity for the facilities. The order will also provide incentives for the creation of public-private partnerships to further expand manufacturing capacity in the US.
Biotech and the life sciences real estate sector has soared over the last three years, aided by the race to develop COVID-19 vaccines and a robust pipeline of new products gaining regulatory approvals. Continued demand for more space from pharmaceutical companies has led to a vacancy rate drop in the top 12 US markets to 5.2 percent, according to Colliers. Lab space development has ramped up in 2022, with more than 31 million square feet of space under construction as of the second quarter. Much of the demand for space is tied to the record number of new regulatory approvals, especially within the gene and cell therapy area. Ten years after CRISPR—a revolutionary gene-editing technology—was developed, a slew of products are now beginning to come to market, and Series A companies are still frequently forming. And with the lengthy timeline developing pharmaceutical products can take, sometimes up to 20 years, we will continue to see the life sciences industry expand across the country.