Medtech and biomanufacturing fuel life sciences growth

Medtech companies require state-of-the-art lab facilities to conduct research and development activities as they strive to bring innovative devices and technologies to market. These companies often require specialized lab space equipped with cutting-edge equipment, cleanrooms and controlled environments. Moreover, medtech companies often collaborate with academic institutions, healthcare providers and other industry partners, driving the need for flexible and collaborative lab spaces that foster innovation and collaboration.

Key U.S. medtech markets

As highlighted in JLL’s recent 2023 Life Sciences Industry and Real Estate Perspective, Orange County, Calif.;  Minneapolis; the San Francisco Bay Area; Boston and Salt Lake City are among key markets that are thriving. These cities have established medtech clusters and robust ecosystems conducive to innovation and collaboration.

While Boston has the most aggregate medtech employment in its market at 40,433, Orange County has the highest concentration of medtech employment as a percentage of total (nonfarm) employment at 1.78%. Minneapolis quickly follows Boston and Orange County for the second highest employment at 32,074 and employment concentration at 1.71%, respectively.

San Diego is another market demonstrating strength in medtech; it comes in with the fifth highest employment, sixth densest employment concentration and third highest healthcare devices venture capital funding over the past five years, making it a well-rounded growth opportunity market. Additionally, Memphis, New Haven-Hartford, Boulder, Sacramento and Phoenix are markets to watch due to their medtech employment concentration and steady growth over the past five years.

The growing significance of biomanufacturing

Biomanufacturing, which involves the production of biologics and cell and gene therapies, is experiencing significant growth due to breakthroughs in biotechnology and increasing demand for advanced therapies. The biomanufacturing sector relies heavily on specialized lab spaces that adhere to strict regulatory requirements, including Current Good Manufacturing Practice (GMP), which seeks to eliminate risk of contamination as materials move through the manufacturing process.

“All life sciences manufacturing facilities require cGMP compliance, and best-in-class cGMP manufacturing facilities have stricter manufacturing application protocol and design qualifications than other manufacturing facilities,” said Kevin Wayer, President, Life Sciences, Work Dynamics Division, JLL. “Having a strong facilities maintenance program that includes quality and safety training for the technical workforce is more important than ever. It ensures not only a safe environment for employees but for the patients who use the products.”

Top U.S. biomanufacturing markets

The key biomanufacturing markets include Raleigh-Durham, Philadelphia, New Jersey, Boston and the San Francisco Bay Area. These regions have a strong presence of contract manufacturing organizations (CMOs), concentration of talent, research institutions and industry collaborations in the area, which drives the demand for lab real estate tailored to biomanufacturing needs.

New Jersey has the highest biomanufacturing employment, at 24,428, making up .8% of its total (nonfarm) employment. Whereas, Indianapolis has the highest concentration of medtech employment in its market, at 1.46%, only accounting for 15,371 employees. New York City has the most companies conducting ongoing phase 2 and 3 clinical trials – a lagging yet leading indicator for the need of biomanufacturing space.

Boulder, which is also a key medtech market, boasts a strong biomanufacturing employment concentration, at 1.08% of its employment. AGC Biologics, a global contract development and manufacturing organization (CDMO) out of Seattle, has made continuous bets on the biomanufacturing market in Boulder – in 2020, AGC acquired a large-scale biopharmaceutical facility with space for six 20,000-liter bioreactors, and since has continued to expand its footprint in the Boulder and Northwest Corridor area.

Other markets to watch include Greater DC and Baltimore, San Diego, Chicago and Miami. From 2018 to 2022, biomanufacturing employment grew, on average, 33% in these markets. They also have the fourth, fifth, sixth and seventh most existing CMO’s in their market today, respectively.  

The medtech and biomanufacturing sectors are driving demand for specialized lab space in key markets across the United States. The growth and innovation within these sectors present significant opportunities for investors, tenants and stakeholders in the commercial real estate industry.

JLL's vision is to reimagine the world of real estate, creating, finding, locating and operating safe and amazing spaces. JLL’s Life Sciences team of 3,000+ experienced professionals are a safe pair of hands to help biotechnology, pharmaceutical, medical devices organizations, investors and developers achieve their ambitions. JLL brings deep understanding of location analytics, project management, research advisory, financial incentives, transaction management, capital markets, real estate strategy and technology, facilities management, regulatory compliance and quality, and more. Our solutions help fuel innovation, enhance efficiency, improve financial performance and attract and retain top talent. Our team is trained and certified to operate within office and critical, regulated environments of lab and manufacturing space. To learn more, visit us.jll.com/lifesciences.

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