The overall cost of operating within the life sciences industry is rising due to increased lab rents in top-tier clusters, R&D costs and higher wages for skilled employees. Life sciences real estate vacancy rates remain unfathomably low in top clusters like Boston and the Bay Area, and asking rents continue to rise. Meanwhile, secondary markets like Denver are seeing an uptick in leasing activity, and as vacancy rates slide these clusters are quickly becoming supply-constrained as well. See how the country's top markets fare in our ranking report, and get an overview of four key industry themes to keep an eye on. Learn more at: http://bit.ly/life-sciences-outlook-2016

1. Life
Sciences
Outlook
Rents
rising,
options
shrinking
United States | 2016

2. JLL Life Sciences Outlook
1
2016 U.S. Cluster rankings
Rank Cluster Weighted score
1 Greater Boston 87.5
2 San Francisco Bay Area 75.2
3 Raleigh-Durham 60.7
4 San Diego 58.3
5 Seattle-Bellevue 56.3
6 Maryland Suburbs / Metro D.C. 53.2
7 Philadelphia 49.4
8 Los Angeles / Orange County 44.7
Rank Cluster Weighted score
9 Westchester County, N.Y. 41.2
10 New Jersey 40.8
11 New York City 34.7
12 Minneapolis 34.5
13 Denver 34.5
14 Chicago 30.7
15 Central & Southern Florida 30.6
16 Long Island, N.Y. 30.0
Life sciences employment concentration: Weight: 20.0%
Life sciences employment growth: Weight: 10.0%
Life sciences establishments concentration: Weight: 10.0%
Life sciences venture capital funding: Weight: 15.0%
National Institute of Health funding: Weight: 15.0 %
Market Occupancy Rate: Weight: 10.0%
Average Asking Rent (NNN): Weight: 10.0%
Rentable Lab Supply: Weight: 10.0%

3. Asking
rents
climbing in
clusters
across the
U.S.
Top U.S. submarkets Asking rent ($ NNN) Vacancy
East Cambridge (Boston) $70.12 p.s.f. 0.8%
North County (Bay Area) $57.84 p.s.f. 0.5%
I-287 West (Westchester) $52.00 p.s.f. 11.0%
Torrey Pines (San Diego) $47.40 p.s.f. 3.3%
Lake Union (Seattle) $43.87 p.s.f. 2.6%
CBD (Philadelphia) $28.00 p.s.f. 1.5%

4. Submarket spotlight
Mid-Peninsula – Bay Area Manhattan & Brooklyn – NYC Boulder / NW – Denver Metro
As the imbalance between tenant demand and
available lab space grows, the region is seeing
increased tenant migration toward dense life
sciences hubs in the Mid-Peninsula, driving more
than 1.6 million square feet of brand new
development.
A global powerhouse in the commercial real
estate market, New York City’s life sciences
cluster is rapidly growing. Development is
highlighted by Cornell’s new 2.1 million-square-
foot tech campus dedicated to the applied
sciences, expected to deliver in 2017.
Following recently signed lease deals this
summer, the Boulder / Northwest submarket is
anticipating a notable amount of positive net
absorption. With the support of NIH funding,
which increased by $280 million year-over-year,
the cluster is gaining attention on a national scale.
Average lab rent (NNN): $51.87 p.s.f New Class A Lab (NNN): $90-105 p.s.f. Average lab rent (NNN): $18.77 p.s.f.
Average lab vacancy: 0.7% Average lab vacancy: 14.1% Direct lab vacancy: 11.7%
YOY rent growth: 41.8% Under construction: 3.6 million s.f. Total RBA: 4.0 million s.f.

5. M&A
M&A activity amongst
pharmaceutical and biotech
companies saw a record
number of transactions in
2015, totaling $520 billion.
$520B

6. Industry theme #1:
Strategic hunt for revenue growth
Source: U.S. Food and Drug Administration
Total Healthcare M&A deals
$0
$100
$200
$300
$400
$500
$600
2010 2011 2012 2013 2014 2015
< $500M $500M to $5B $5B to $20B > $20B

7. Industry theme #2:
Influx of new sources of capital
Source: ???
Total Biotech VC funding
700
750
800
850
900
950
1,000
$
$ 2
$ 4
$ 6
$ 8
$ 10
$ 12
2007 2008 2009 2010 2011 2012 2013 2014 2015
Billions
Investment Volume Total Deals

8. Industry theme #3:
Tight markets drive new real estate solutions
Source: JLL Research
Vacancy by submarket
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
North County - Bay
Area
East Cambridge -
Boston
Philadelphia - CBD Lake Union - Seattle Los Angeles Torrey Pines - San
Diego
I-270 Maryland
Suburbs

9. Industry
theme #4:
Prioritizing
talent critical
to growth
Source: QS World University Rankings
3.40%
3.50%
3.60%
3.70%
3.80%
3.90%
4.00%
4.10%
4.20%
4.30%
$72,000
$73,000
$74,000
$75,000
$76,000
$77,000
$78,000
$79,000
$80,000
$81,000
2012 2013 2014 2015
Annual Mean Wage
Employment Growth

10. Implications
for life
sciences
companies?
• As M&A and business swapping increases, it will result in
an increase in vacant space in secondary markets and
lead to the renovation of older space to meet the needs of
life sciences companies.
• Advances in medicine and global demographic trends
point to an overall expansion of the life sciences industry.
With demand still outweighing supply, asking rents for lab
space can be expected to continue to rise, particularly in
premier clusters.
• Unlike in other industries where companies are more
inclined to flee top markets for the sake of affordability,
life sciences tenants continue to seek out options in top
clusters. With diminishing space options, secondary
submarkets in top clusters are emerging and becoming
more established.

11. © Copyright 2016 Jones Lang LaSalle
For more information, please contact:
Roger Humphrey
Executive Managing Director
Life Sciences
+1 (908) 698-2867
Roger.Humphrey@am.jll.com
Dan Loughlin
International Director
Brokerage, New Jersey
+1 (973) 939-3869
Dan.Loughlin@am.jll.com
Richard McBlaine
International Director
Corporate Client Development
+1 (312) 228-2793
Richard.Mcblaine@am.jll.com
Lisa Strope
Director, New England Research
Americas Research
+1 (617) 531-4243
Lisa.Strope@am.jll.com
Wes Simon
Analyst, Boston Research
Americas Research
+1 (617) 531-4216
Wes.Simon@am.jll.com