REITs active in life sciences real estate are increasingly looking to complement their domestic portfolios with holdings in international markets where world-class scientists and strong infrastructure are creating a “vibrant ecosystem,” says Travis McCready, head of life sciences, Americas markets, at JLL.
“The life sciences market is increasingly going global, and from a REIT perspective, it's going global faster,” McCready told Nareit’s REIT Report. “I can't think of any of the leading REITs, publicly traded or private, that are simply looking at portfolios in the U.S. anymore. Everyone is looking for exposure across the Atlantic and across the Pacific.”
In addition to seeking ways to deploy capital, REITs are taking advantage of international markets that are “incredibly effective” at creating conditions ripe for life sciences innovation, McCready said.
Elsewhere in the podcast, McCready noted that from a venture capital standpoint, things are looking “quite good” for the life sciences market. However, “where the picture seems to change radically is when you start looking at the public markets, particularly IPOs, which for the life sciences ecosystem is somewhat of the lifeblood and the way that capital and exits are created.”
During the podcast, McCready also noted that:
- 2022 is on track to be the worst year for life sciences IPOs in over a decade.
- The five major markets of Boston, San Diego, San Francisco, the Maryland/D.C. area, and Raleigh Durham have seen a decline in demand for space over the past year from about 21 million square feet to 14 million square feet.
- The emergence of a sublease market bodes well for larger scaling companies in the pipeline going forward in 2023 and beyond.
- The overall U.S. life sciences market is maturing.
- Smaller population cities like Boulder, Colorado, Salt Lake City, and Pittsburgh are emerging life sciences markets that are attracting the attention of investors and venture capital.