Both investment in and demand for life sciences space are rising in Los Angeles, further establishing the sector as one of the fastest-growing alternative asset classes after the pandemic.
CBRE’s most recent national life sciences report shows increasing developer interest in Los Angeles. For example, CoStar reported this week that BEP Helix, led by biotech investor Ben Pouladian, is set to buy the leasehold interest in the 280,000-square-foot Park DTLA office building and will convert it into a life sciences campus. And last month, the University of Southern California agreed to pay $57 million for a 75,272-square-foot life sciences building at the Health Sciences Campus east of Downtown L.A.
L.A. is also seeing an influx of venture capital investment. CBRE ranked L.A. as the seventh-largest market in the country for life sciences VC funding with $350 million in the third quarter of 2021 (the three largest markets receive 70 percent of all venture capital funding.) And continued National Institutes of Health funding and home-grown STEM talent led to more demand in L.A. for lab and R&D development.
The region currently ranks as the ninth-largest life sciences employment hub with 46,000 jobs in the segment in 2020. That compares to 69,000 in San Diego and 129,000 in San Francisco. There are currently three properties under construction in the region, including a mixed-use conversion and a ground-up project in the San Fernando Valley at 18422 Oxnard Street. And in West L.A., HATCHspaces partnered again with NexCore Group for a 100,000-square-foot wet lab and office building.
CBRE also reported that leasing volume in Greater L.A. continues to climb as more companies look to expand, and the heightened interest has led to one of the fastest-growing new real estate ventures: lab coworking. LabLaunch, BioLabs and HATCHspaces all have facilities in bioscience hubs of Greater L.A.
“Founders have the confidence that they can grow a life science company in L.A.,” CBRE’s Andrew Riley said. “The city has caught the interest of the real estate development and venture capital community. Not to mention, the talent continues to improve and is ripe for the picking. We’re even starting to see companies from out-of-state explore what lease opportunities exist in the L.A. market — a great sign for sure.”
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