Los Angeles Is Going to Need More Lab Space
Venture capital funding in L.A. life sciences jumped 566 percent in the last five years; and the region produces the second-most bio sciences grads in the nation
By Greg Cornfield June 14, 2022 6:00 pm
reprints
More data and analysis shows that the life sciences industry in Los Angeles isn’t just booming, it has the makings for a big bang.
As part of a new national report by CBRE (CBRE), the brokerage identified the top 25 life sciences labor markets based on the existing market, projected job growth and the size of the graduate pool in the field. The L.A.-Orange County region ranks No. 7 for research talent, and boasts the second-most annual graduates in biological and biomedical sciences in the country.
Southern California benefits from its major leading universities and industry presence. About 4.5 percent of all biological and biomedical sciences PhDs in the nation’s largest markets are issued from L.A.-Orange County thanks to institutions like UCLA, UC-Irvine and the University of Southern California.
“Quality and availability of labor are key considerations for any expanding industry, and that’s certainly the case for life sciences,” said Ian Anderson, CBRE’s Americas head of life science and health care research. “Lab vacancy rates are tight in most markets, even amid strong construction activity. Expanding life sciences companies can choose from dozens of U.S. markets depending on their labor and real estate needs.”
L.A. saw the fifth-highest growth rate in terms of life sciences researchers between 2015 and 2020, as well as the fifth-largest pool of life sciences research talent in the nation, according to CBRE.
“Particularly over the past five years, this region has had some phenomenal success stories in the startup space,” said CBRE’s L.A.-based vice chairman Jeff Pion. “We have tremendous powerhouses like Arie Belldegrun and Patrick Soon-Shiong here. These innovators have helped attract serious venture capital money, as well as talent. Add to that our unmatched university infrastructure and diverse ecosystem. These factors have had a significant impact putting this market on the life sciences map.”
Experts of the rapidly expanding life sciences industry frequently explain that the biggest differences between the smaller but growing markets like L.A. and the major hubs like San Diego and the Bay Area are the abilities to produce, draw and maintain talent. CBRE explains that L.A. offers a greater absolute mass of talent than many markets, but the talent is notably dispersed across a wide area, and investment and infrastructure in L.A. pales in comparison to San Diego and the Bay Area.
But the tides are showing signs of a change, as venture capital funding in life sciences in L.A. jumped 566 percent in the last five years, compared to the national increase of 345 percent, CBRE reported.
CBRE also noted that the unemployment rate in life sciences is at a historic low. Even with the national influx of graduates receiving degrees in biological and biomedical sciences, the U.S. unemployment rate for life, physical and social sciences was less than 1 percent as of April.
“It’s also important to keep in mind that the life sciences industry encompasses more than drug development in the lab,” said Matt Gardner, CBRE’s Americas life sciences leader. “Major growth drivers for life sciences — even amid market headwinds — include personalized treatment, advanced materials and future foods.”
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
