What is the life science real estate sector
After the pandemic, the attractiveness of commercial real estate has declined significantly, and so far investors are wary of investing in it. Therefore, they are actively looking for new options to make a profit. A new sector of real estate is gaining popularity – life science, which includes facilities aimed at preserving people’s health and comfort.
If we consider in general, the concept of life science is characterized by a set of methods and tools that study the relationship of living beings with each other and with the surrounding world. If we talk about life science only in the context of the person, this science deals with issues of medicine, health, biology and other aspects that improve life and improve its quality. And to provide these components, it is necessary to have a number of tools, among which are real estate. The latter include laboratories, warehouses, manufacturing facilities for medical needs and specialized offices.
According to the PWC study, life science real estate is the third most promising sector, which increased in popularity during the pandemic. The field itself has been growing since the 2000s, influenced by a surge in scientific research in life-enhancing fields. Between 2008 and 2019, investment in such companies increased 4.6-fold. And now, due to the urgency of the vaccine issue, the investment has become even greater. This is especially evident in the example of companies that work in the field of life science – Pfizer and Modesta.
The segment is developing, and with it the need for specialists is increasing. The staff is growing, and their work requires real estate that will meet all the requirements of the company’s specifics. Newmark Knight Frank estimates that more than $10 billion was invested in life science facilities in 2020, a record amount for the segment. The biggest beneficiaries were pharmaceutical companies, whose relevance has grown more than ever. According to data, the number of labs in the U.S. has doubled since 2019.
The second promising option for the life science sector is real estate for health care and senior care. There is an aging nation around the world, and specialized facilities and technology development are needed to care for them and prolong their lives.
An important advantage of life science real estate is the security of investment. In this case, even with the loss of tenants and a decrease in rates, the loss will still be less than the investment in stocks or cryptocurrency. However, it is worth understanding that this kind of object requires special equipment, and for each area it can be individual. That is why it is not always possible to arrange a universal space, which would be suitable for a pharmaceutical company or a startup for the development of biomechanical technologies.